Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/109373 
Year of Publication: 
2010
Series/Report no.: 
ADB Economics Working Paper Series No. 197
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
There are four major modes through which firms undertake foreign direct investment (FDI): merger and acquisition (M&A), joint venture, new plant, and others. The four modes of FDI are distinct from each other, and each has its own unique advantages and disadvantages. While a large and growing empirical literature examines the determinants of FDI, very few studies examine the determinants of the different modes. The central objective of this paper is to empirically analyze the extent to which the determinants of FDI such as firm size influence the choice of one mode of FDI over another. Our analysis follows a stylized two-stage investment process. First, we look at the probability of whether a Japanese firm is willing to undertake FDI in the United States. Second, which is the innovation of this paper and its main original contribution to the FDI literature, we analyze which of the four modes of FDI will be chosen by firms that are willing to undertake FDI.
Subjects: 
FDI
merger and acquisition
joint venture
new plant
relative access to bank credit
relative wealth
hurdle regression model
multinomial logit model
JEL: 
F21
F23
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

Files in This Item:
File
Size
3.86 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.