In this paper we examine the role of investment promotion agencies (IPA) in promoting outward foreign direct investment (FDI) from Japan and Korea. Looking at two home countries enables us to control for both country-pair time-invariant characteristics and host-country time-varying characteristics. Our empirical results suggest that home-country IPA tend to be more effective in promoting outward FDI in politically risky host countries. However, this finding depends on whether the home-country firm is listed or unlisted. More specifically, we find that the positive effect of home-country IPA on outward FDI in politically risky countries is limited to unlisted home-country firms, which tend to be less productive."> In this paper we examine the role of investment promotion agencies (IPA) in promoting outward foreign direct investment (FDI) from Japan and Korea. Looking at two home countries enables us to control for both country-pair time-invariant characteristics and host-country time-varying characteristics. Our empirical results suggest that home-country IPA tend to be more effective in promoting outward FDI in politically risky host countries. However, this finding depends on whether the home-country firm is listed or unlisted. More specifically, we find that the positive effect of home-country IPA on outward FDI in politically risky countries is limited to unlisted home-country firms, which tend to be less productive."> In this paper we examine the role of investment promotion agencies (IPA) in promoting outward foreign direct investment (FDI) from Japan and Korea. Looking at two home countrie">
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Are Investment Promotion Agencies Effective in Promoting Outward Foreign Direct Investment? The Cases of Japan and Korea

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  • Kazunobu Hayakawa
  • Hyun-Hoon Lee
  • Donghyun Park
Abstract
type="main"> In this paper we examine the role of investment promotion agencies (IPA) in promoting outward foreign direct investment (FDI) from Japan and Korea. Looking at two home countries enables us to control for both country-pair time-invariant characteristics and host-country time-varying characteristics. Our empirical results suggest that home-country IPA tend to be more effective in promoting outward FDI in politically risky host countries. However, this finding depends on whether the home-country firm is listed or unlisted. More specifically, we find that the positive effect of home-country IPA on outward FDI in politically risky countries is limited to unlisted home-country firms, which tend to be less productive.

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  • Kazunobu Hayakawa & Hyun-Hoon Lee & Donghyun Park, 2014. "Are Investment Promotion Agencies Effective in Promoting Outward Foreign Direct Investment? The Cases of Japan and Korea," Asian Economic Journal, East Asian Economic Association, vol. 28(2), pages 111-138, June.
    • Handle: RePEc:bla:asiaec:v:28:y:2014:i:2:p:111-138
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    2. Jerónimo Carballo & Ignacio Marra de Artiñano & Christian Volpe Martincus, 2021. "Information Frictions, Investment Promotion, and Multinational Production: Firm-Level Evidence," CESifo Working Paper Series 9043, CESifo.
    3. Du, Julan & Zhang, Yifei, 2018. "Does One Belt One Road initiative promote Chinese overseas direct investment?," China Economic Review, Elsevier, vol. 47(C), pages 189-205.
    4. Soraya Caro Vargas (Editor) & Carlos Alberto Restrepo Rivillas (Editor), 2022. "Atracción de inversión extranjera directa desde países emergentes : el caso de India y Colombia," Books, Universidad Externado de Colombia, Facultad de Administración de Empresas, number 58, August.
    5. Carballo, Jerónimo & Marra de Artiñano, Ignacio & Sztajerowska, Monika & Volpe Martincus, Christian, 2023. "How Do Investment Promotion Policies Affect Sustainability?," IDB Publications (Working Papers) 13306, Inter-American Development Bank.
    6. Zhou, Na & Wu, Qiaosheng & Hu, Xiangping & Xu, Deyi & Wang, Xiaolin, 2020. "Evaluation of Chinese natural gas investment along the Belt and Road Initiative using super slacks-based measurement of efficiency method," Resources Policy, Elsevier, vol. 67(C).

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