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Title:FDI liberalization, firm heterogeneity and foreign ownership: German firm decisions in reforming India PDF Logo
Authors:Görg, Holger
Mühlen, Henning
Nunnenkamp, Peter
Issue Date:2010
Series/Report no.:Proceedings of the German Development Economics Conference, Hannover 2010 35
Abstract:The paper investigates the role of firm-level productivity and industry-level R&D for MNEs' choice of undertaking FDI, and the share of ownership in foreign affiliates. Two firm-specific datasets on German MNEs with varying equity stakes in Indian affiliates are used to account for the two-step decision process. The paper also analyses how German firm decisions were affected by the liberalisation of FDI regulations in India. Results show remarkable differences between the selection and the ownership share equation, and also between the pre-reform and post-reform periods. The evidence clearly reveals the tradeoffs involved in selective FDI approvals and foreign ownership restrictions.
Subjects:multinational enterprises
firm characteristics
selective FDI approval
German FDI
ownership share
Heckman model
JEL:F23
L25
Document Type:Conference Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Proceedings of the German Development Economics Conference, 2010 (Hannover)

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