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dc.contributor.authorDadasov, Raminen_US
dc.contributor.authorLorz, Jens Oliveren_US
dc.date.accessioned2010-09-13T15:07:59Z-
dc.date.available2010-09-13T15:07:59Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/40004-
dc.description.abstractWe develop a politico-economic model to analyze the relationship between mode of entry into a new market and institutional quality of the host country. A foreign investor can either purchase a domestic firm, what we consider as FDI, or form a joint venture, in which the control right over the firm rests with the domestic entrepreneur. In an autocratic regime, the ruling elite uses its political power to implement expropriatory policies. In an integrated firm the risk of expropriation targets the foreign investor whereas in a joint venture the domestic agent bears this risk. We determine the equilibrium level of the probability of expropriation and show that the ruling elite, by choosing it, discriminates in favor of the foreign investor. This has implications for the form of invested capital, and thus for the organizational structure of active firms in the host country.en_US
dc.language.isoengen_US
dc.publisherVerein für Socialpolitik, Ausschuss für Entwicklungsländer Göttingenen_US
dc.relation.ispartofseriesProceedings of the German Development Economics Conference, Hannover 2010 27en_US
dc.subject.jelF21en_US
dc.subject.jelL22en_US
dc.subject.jelP48en_US
dc.subject.ddc330en_US
dc.subject.keywordForeign direct investmentsen_US
dc.subject.keywordjoint venturesen_US
dc.subject.keywordproperty rightsen_US
dc.subject.keywordexpropriationen_US
dc.titleMode of Entry and Expropriationen_US
dc.typeConference Paperen_US
dc.identifier.ppn654348987-
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:gdec10:27-
Appears in Collections:Proceedings of the German Development Economics Conference, 2010 (Hannover)

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