FDI, ownership structure, and productivity

The standard firm heterogeneity model of FDI considers the case of whole ownership of foreign affiliates. However, there exist many partially-owned foreign affiliates. This paper builds a model based on Helpman et al. (2004) to allow various ownership structures and posits some testable hypotheses o...

Full description

Saved in:
Bibliographic Details
Published inJapan and the world economy Vol. 64; p. 101158
Main Authors Ito, Tadashi, Tanaka, Ayumu
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.12.2022
Subjects
FDI
Ownership share
Productivity
Productivity
FDI
F20
F23
Ownership share
Online AccessGet full text

Cover

More Information
Summary:The standard firm heterogeneity model of FDI considers the case of whole ownership of foreign affiliates. However, there exist many partially-owned foreign affiliates. This paper builds a model based on Helpman et al. (2004) to allow various ownership structures and posits some testable hypotheses on the relationship between productivity and ownership shares/structures. The empirical part corroborates these hypotheses, showing that high productivity firms tend to have a higher ownership share in their affiliates, and lower productivity firms tend to opt for joint-ventures with wholesalers and/or local/3rd country partners. •A model based on Helpman et al. (2004) to allow various ownership structures.•Testable hypotheses on the relationship between productivity and ownership structures.•Higher productivity firms tend to have a higher ownership share in their affiliates.•Lower productivity firms tend to opt for joint-ventures.
ISSN:0922-1425
1879-2006
DOI:10.1016/j.japwor.2022.101158