FDI Liberalization, Firm Heterogeneity and Foreign Ownership: German Firm Decisions in Reforming India
- Publication Type
- Journal contribution (peer reviewed)
- Authors
- Holger Görg, Henning Mühlen & Peter Nunnenkamp
- Year of publication
- 2010
- Published in
- Journal of Development Studies
- Band/Volume
- Vol.46/No. 8
- ISBN / ISSN / eISSN
- 1743-9140
- DOI
- 10.1080/00220380903318053
- Page (from - to)
- 1367-1384
The paper investigates the role of firm-level productivity and industry-level R&D for multinational enterprises' (MNEs') choice of undertaking foreign direct investment (FDI), and the share of ownership in foreign affiliates. Two firm-specific datasets on German MNEs with varying equity stakes in Indian affiliates are used to account for the two-step decision process. The paper also analyses how German firm decisions were affected by the liberalisation of FDI regulations in India. Results show remarkable differences between the selection and the ownership share equation, and also between the pre-reform and post-reform periods. The evidence clearly reveals the trade-offs involved in selective FDI approvals and foreign ownership restrictions.
Involved persons
Involved institutions
- Economics: International Economics
- Faculty of Business, Economics and Social Sciences
- Institute of Economics