Multinational firms, FDI flows and imperfect capital markets:
This paper examines how costly financial contracting and weak investor protection influence the cross-border operational, financing and investment decisions of firms. We develop a model in which product developers have a comparative advantage in monitoring the deployment of their technology abroad....
Gespeichert in:
| Hauptverfasser: | , , |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2007
|
| Schriftenreihe: | Working paper series / National Bureau of Economic Research
12855 |
| Online-Zugang: | kostenfrei |
| Zusammenfassung: | This paper examines how costly financial contracting and weak investor protection influence the cross-border operational, financing and investment decisions of firms. We develop a model in which product developers have a comparative advantage in monitoring the deployment of their technology abroad. The paper demonstrates that when firms want to exploit technologies abroad, multinational firm (MNC) activity and foreign direct investment (FDI) flows arise endogenously when monitoring is nonverifiable and financial frictions exist. The mechanism generating MNC activity is not the risk of technological expropriation by local partners but the demands of external funders who require MNC participation to ensure value maximization by local entrepreneurs. The model demonstrates that weak investor protections limit the scale of multinational firm activity, increase the reliance on FDI flows and alter the decision to deploy technology through FDI as opposed to arm's length licensing. Several distinctive predictions for the impact of weak investor protection on MNC activity and FDI flows are tested and confirmed using firm-level data. |
| Beschreibung: | 42, [6] S. 22 cm |
Internformat
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| 100 | 1 | |a Antràs, Pol |d 1975- |e Verfasser |0 (DE-588)128734566 |4 aut | |
| 245 | 1 | 0 | |a Multinational firms, FDI flows and imperfect capital markets |c Pol Antras ; Mihir A, Desai ; C. Fritz Foley |
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| 490 | 1 | |a Working paper series / National Bureau of Economic Research |v 12855 | |
| 520 | |a This paper examines how costly financial contracting and weak investor protection influence the cross-border operational, financing and investment decisions of firms. We develop a model in which product developers have a comparative advantage in monitoring the deployment of their technology abroad. The paper demonstrates that when firms want to exploit technologies abroad, multinational firm (MNC) activity and foreign direct investment (FDI) flows arise endogenously when monitoring is nonverifiable and financial frictions exist. The mechanism generating MNC activity is not the risk of technological expropriation by local partners but the demands of external funders who require MNC participation to ensure value maximization by local entrepreneurs. The model demonstrates that weak investor protections limit the scale of multinational firm activity, increase the reliance on FDI flows and alter the decision to deploy technology through FDI as opposed to arm's length licensing. Several distinctive predictions for the impact of weak investor protection on MNC activity and FDI flows are tested and confirmed using firm-level data. | ||
| 700 | 1 | |a Desai, Mihir A. |d 1968- |e Verfasser |0 (DE-588)128956798 |4 aut | |
| 700 | 1 | |a Foley, C. Fritz |e Verfasser |0 (DE-588)129263060 |4 aut | |
| 776 | 0 | 8 | |i Erscheint auch als |n Online-Ausgabe |
| 810 | 2 | |a National Bureau of Economic Research <Cambridge, Mass.> |t NBER working paper series |v 12855 |w (DE-604)BV002801238 |9 12855 | |
| 856 | 4 | 1 | |u http://papers.nber.org/papers/w12855.pdf |z kostenfrei |3 Volltext |
| 999 | |a oai:aleph.bib-bvb.de:BVB01-016908103 | ||
Datensatz im Suchindex
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| id | DE-604.BV023592773 |
| illustrated | Not Illustrated |
| index_date | 2024-07-02T22:41:30Z |
| indexdate | 2024-07-09T21:25:13Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-016908103 |
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| physical | 42, [6] S. 22 cm |
| publishDate | 2007 |
| publishDateSearch | 2007 |
| publishDateSort | 2007 |
| publisher | National Bureau of Economic Research |
| record_format | marc |
| series2 | Working paper series / National Bureau of Economic Research |
| spelling | Antràs, Pol 1975- Verfasser (DE-588)128734566 aut Multinational firms, FDI flows and imperfect capital markets Pol Antras ; Mihir A, Desai ; C. Fritz Foley Cambridge, Mass. National Bureau of Economic Research 2007 42, [6] S. 22 cm txt rdacontent n rdamedia nc rdacarrier Working paper series / National Bureau of Economic Research 12855 This paper examines how costly financial contracting and weak investor protection influence the cross-border operational, financing and investment decisions of firms. We develop a model in which product developers have a comparative advantage in monitoring the deployment of their technology abroad. The paper demonstrates that when firms want to exploit technologies abroad, multinational firm (MNC) activity and foreign direct investment (FDI) flows arise endogenously when monitoring is nonverifiable and financial frictions exist. The mechanism generating MNC activity is not the risk of technological expropriation by local partners but the demands of external funders who require MNC participation to ensure value maximization by local entrepreneurs. The model demonstrates that weak investor protections limit the scale of multinational firm activity, increase the reliance on FDI flows and alter the decision to deploy technology through FDI as opposed to arm's length licensing. Several distinctive predictions for the impact of weak investor protection on MNC activity and FDI flows are tested and confirmed using firm-level data. Desai, Mihir A. 1968- Verfasser (DE-588)128956798 aut Foley, C. Fritz Verfasser (DE-588)129263060 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.> NBER working paper series 12855 (DE-604)BV002801238 12855 http://papers.nber.org/papers/w12855.pdf kostenfrei Volltext |
| spellingShingle | Antràs, Pol 1975- Desai, Mihir A. 1968- Foley, C. Fritz Multinational firms, FDI flows and imperfect capital markets |
| title | Multinational firms, FDI flows and imperfect capital markets |
| title_auth | Multinational firms, FDI flows and imperfect capital markets |
| title_exact_search | Multinational firms, FDI flows and imperfect capital markets |
| title_exact_search_txtP | Multinational firms, FDI flows and imperfect capital markets |
| title_full | Multinational firms, FDI flows and imperfect capital markets Pol Antras ; Mihir A, Desai ; C. Fritz Foley |
| title_fullStr | Multinational firms, FDI flows and imperfect capital markets Pol Antras ; Mihir A, Desai ; C. Fritz Foley |
| title_full_unstemmed | Multinational firms, FDI flows and imperfect capital markets Pol Antras ; Mihir A, Desai ; C. Fritz Foley |
| title_short | Multinational firms, FDI flows and imperfect capital markets |
| title_sort | multinational firms fdi flows and imperfect capital markets |
| url | http://papers.nber.org/papers/w12855.pdf |
| volume_link | (DE-604)BV002801238 |
| work_keys_str_mv | AT antraspol multinationalfirmsfdiflowsandimperfectcapitalmarkets AT desaimihira multinationalfirmsfdiflowsandimperfectcapitalmarkets AT foleycfritz multinationalfirmsfdiflowsandimperfectcapitalmarkets |