Interaction between firm-level and host-country characteristics and multinationals' integration choices

No DT/2018/03, Working Papers from DIAL (Développement, Institutions et Mondialisation)

Abstract: This paper extends the traditional international make or buy dilemma with a twofold contribution. First it considers joint-ventures, breaking with the common dichotomy. Second, it introduces a second source of heterogeneity among multinational rms, besides productivity: internationalization experience, which provides the rms complementary assets than does the total factor productivity (TFP). While both TFP and experience foster international integration, TFP is found to be more determinant in countries with strong contractual institutions and (only) experience matters in less certain destinations. The predictions from our reduced-form model are supported by the empirical examination of 6,321 French foreign affiliates in 87 countries.

Keywords: FDI; joint-venture; foreign ownership; Firm heterogeneity; total factor productivity; Gradual Internationalization. (search for similar items in EconPapers)
JEL-codes: D24 F21 F23 L24 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2018-01
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:dia:wpaper:dt201803

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