scholarly journals LOCATION CHOICE OF SPANISH MULTINATIONAL FIRMS IN DEVELOPING AND TRANSITION ECONOMIES

2017 ◽  
Vol 18 (2) ◽  
pp. 319-339
Author(s):  
Josep MARTÍ ◽  
Maite ALGUACIL ◽  
Vicente ORTS
Keyword(s):  
Transition Economies ◽  
Financial Risk ◽  
Multinational Firms ◽  
Mixed Logit ◽  
Discrete Choice Models ◽  
Empirical Literature ◽  
Foreign Direct Investments ◽  
Logit Models ◽  
Firm Level ◽  
Local Factors

In this paper, we use firm-level data to investigate how different host country characteristics affect the decision of Spanish multinational firms to locate in developing and transition countries, and whether these determinants change when looking at manufacturing or services firms. As a methodological novelty, we estimate both standard conditional logit models as well as other discrete choice models that allow us to account for the possibility that firms perceive some alternative destinations as being more similar (nested and mixed logit models). A better understanding of the relevance of local factors that determine the competitiveness of these economies in providing multinational firms with location advantages can guide policymakers in their attempt to attract foreign capital flows. This, however, has not been previously addressed by the empirical literature at a firm level and across sectors. Our results suggest that Spanish investments in developing and transition economies are mainly driven by market-seeking factors. They also confirm the relevance of the business and financial climate in the location decision of multinational firms. Finally, the estimations reveal differences between manufacturing and services foreign direct investments in several local factors, such as the agglomeration effects, skilled labour and financial risk.

FDIs Productivity Spillovers in Regional Clusters: A Comparison between Poland and Romania

2010 ◽  
pp. 99-120
Author(s):  
Chiara Franco ◽  
Kornelia Kozovska
Keyword(s):  
Negative Impact ◽  
Empirical Studies ◽  
Spillover Effects ◽  
Empirical Literature ◽  
High Tech ◽  
Foreign Direct Investments ◽  
The European Union ◽  
Firm Level ◽  
Regional Clusters ◽  
Eastern European Countries

In recent years Foreign Direct Investments (FDIs) inflows towards Eastern European countries have progressively increased, further stimulated by the entry of some countries into the European Union. However, the empirical literature finds mixed evidence for the actual occurrence of spillover effects from MNEs. We contribute to this discussion by investigating whether spillover effects occur more frequently in domestic firms located within regional clusters, taking into account the distinction between low-tech and high-tech sectors. Our findings show no evidence that location within regional clusters contributes to firms benefiting from FDIs spillovers. The findings for Romania show that, on the contrary, the productivity of firms located within regional clusters is influenced more negatively by the presence of MNEs than of firms located outside regional clusters. Furthermore, we find that FDIs have, in most cases, negative impact on firm-level productivity, in line with the previous findings of empirical studies on transition countries.

scholarly journals Size of foreign direct investment and firm characteristics

2018 ◽  
Author(s):  
Hecht Veronika ◽  
Moritz Michael ◽  
Noska Patricia ◽  
Schäffler Johannes
Keyword(s):  
Foreign Direct Investment ◽  
Czech Republic ◽  
Direct Investment ◽  
Multinational Firms ◽  
Sample Selection ◽  
Indirect Measurement ◽  
Empirical Literature ◽  
Firm Level ◽  
Data Set ◽  
The Czech Republic

This paper focuses on the role of classifying types of foreign direct investment (FDI) for analysing the determinants of cross-border investment relationships. We base our investigation on a newly established firm-level data set of German multinational firms and their affiliates in the Czech Republic that allows various categorisations into vertical foreign direct investment (VFDI) and horizontal foreign direct investment (HFDI). Apart from data for conventional approaches to classifying FDI types, the surveyed information contained herein also includes a detailed self-assessment of the firms with respect to investment motives, and specifications on intra-firm trade and the flow of intermediate inputs. In order to correct for sample selection, we apply a two-step Heckman procedure by comparing multinational firms that have an affiliate in the Czech Republic to companies without investment abroad. The results for the direct measures of FDI types confirm theoretical expectations and previous empirical literature and stand in marked contrast to the outcome for indirect measurement concepts. Our finding leads us to the conclusion that one should be more cautious in interpreting differences between vertical and horizontal FDI when using approximative classification concepts.

scholarly journals Performance Analysis of Mixed Logit Models for Discrete Choice Models

2019 ◽  
pp. 563-575
Author(s):  
Jaka Nugraha
Keyword(s):  
Discrete Choice ◽  
Logit Model ◽  
Mixed Logit ◽  
Likelihood Estimation ◽  
Multinomial Logit Model ◽  
Discrete Choice Models ◽  
Logit Models ◽  
Nominal Data ◽  
Mixed Logit Models ◽  
Mnl Model

Mixed Logit model  (MXL) is generated from Multinomial Logit model (MNL) for discrete, i.e. nominal, data. It eliminates its limitations particularly on estimating the correlation among responses.  In the MNL, the probability equations are presented in the closed form and it is contrary with in the MXL. Consequently, the calculation of the probability value of each alternative get simpler in the MNL, meanwhile it needs the numerical methods for estimation in the MXL.  In this study, we investigated the performance of maximum likelihood estimation (MLE) in the MXL and MNL into two cases, the low and high correlation circumstances among responses. The performance is measured based on differencing actual and estimation value.  The simulation study and real cases show that the MXL model is more accurate than the MNL model. This model can estimates the correlation among response as well. The study concludes that the MXL model is suggested to be used if there is a high correlation among responses. 

scholarly journals Size of foreign direct investment and firm characteristics

2018 ◽  
Author(s):  
Hecht Veronika ◽  
Moritz Michael ◽  
Noska Patricia ◽  
Schäffler Johannes
Keyword(s):  
Foreign Direct Investment ◽  
Czech Republic ◽  
Direct Investment ◽  
Multinational Firms ◽  
Sample Selection ◽  
Indirect Measurement ◽  
Empirical Literature ◽  
Firm Level ◽  
Data Set ◽  
The Czech Republic

This paper focuses on the role of classifying types of foreign direct investment (FDI) for analysing the determinants of cross-border investment relationships. We base our investigation on a newly established firm-level data set of German multinational firms and their affiliates in the Czech Republic that allows various categorisations into vertical foreign direct investment (VFDI) and horizontal foreign direct investment (HFDI). Apart from data for conventional approaches to classifying FDI types, the surveyed information contained herein also includes a detailed self-assessment of the firms with respect to investment motives, and specifications on intra-firm trade and the flow of intermediate inputs. In order to correct for sample selection, we apply a two-step Heckman procedure by comparing multinational firms that have an affiliate in the Czech Republic to companies without investment abroad. The results for the direct measures of FDI types confirm theoretical expectations and previous empirical literature and stand in marked contrast to the outcome for indirect measurement concepts. Our finding leads us to the conclusion that one should be more cautious in interpreting differences between vertical and horizontal FDI when using approximative classification concepts.

How do foreign direct investors group by their investments in Turkey and Germany?

2016 ◽  
Vol 11 (3) ◽  
pp. 288-315 ◽  
Author(s):  
Nurhan Aydin ◽  
Gulsah Kulali
Keyword(s):  
Cultural Values ◽  
Financial Risk ◽  
Field Research ◽  
Data Availability ◽  
Foreign Direct Investments ◽  
Firm Level ◽  
Developed Country ◽  
Content Type ◽  
Main Cluster ◽  
Source Countries

Purpose – The purpose of this paper is to classify the source countries of inward foreign direct investments (FDIs) to Turkey and to Germany as individual samples of developing and developed economies, to produce practical information to target company managers and owners that they can use for having much more investments or getting more bargaining power with the existing or potential investors. Design/methodology/approach – Cluster analysis methodology with Ward’s (1963) technique is used to create significant groups out of FDI source countries. Findings – The results show that foreign direct investors – labeled by their country of origin – investing in Turkey are grouped into two main clusters. First main cluster of Turkey has three sub-clusters. Investors investing in Germany are also grouped into two main clusters. First main cluster of Germany has two sub-clusters. Of all seven clustering criteria, four of them were prominent in grouping, which are: having a high equity ownership in the investment, investing in companies with high market capitalization, investing in companies with high/low financial risk and high/low financial performance, and investing in young companies. Furthermore, investors from same origin behave differently in Turkey and Germany. They adjust their attitude toward risk when the host country changes. Lastly, source countries in the sample that have a minimum distance in between, are the ones sharing similar cultural values. Research limitations/implications – The limitations of the study are the small number of observation with complete and standard company data needed, especially in Turkey, and the compelled shortness of time period for the empirical analysis. Some suggestions were offered for future researches to contribute to the topic by using bigger samples; by making variations in country, time, or industry; by relating country factors to social/entrepreneurial factors; and by supporting the research with qualitative techniques. Originality/value – This paper constitutes a contribution to the empirical field research in Turkey, an emerging country with very limited firm-level financial and ownership data, compared to Germany, a developed country with relatively more data availability.

scholarly journals Information related service trade within firms: evidence from firm-level data in Germany

2021 ◽  
Author(s):  
Kurt A. Hafner ◽  
Jörn Kleinert
Keyword(s):  
Multinational Firms ◽  
Economies Of Scope ◽  
It Services ◽  
Firm Level ◽  
It Service ◽  
Level Data ◽  
Related Service ◽  
Foreign Affiliates ◽  
Knowledge Intensive ◽  
Parent Companies

AbstractMulti-unit firms have productivity advantages over competitors because of their use of a non-rival asset—firm-specific knowledge—in several units. Using knowledge-intensive services leads to economies of scope in production by multi-unit firms. Such headquarter are usually supplied by parent companies and serve to link different firm units. Headquarter services are difficult to quantify in statistics or surveys, except when they cross-borders and the exchange of services between MNEs and their offshore subsidiaries becomes apparent. This study therefore focuses on IT service imports to explain productivity differences among foreign affiliates of multinational firms in Germany. The authors base the analysis on the population of foreign multinational firms active in Germany and analyze what effect the import of IT services has on their productivity. They find that IT headquarter service flows have significant impacts on foreign affiliates’ productivity in general and US affiliates in particular. As the average IT-service flows (per firm and partner) from parent countries are significantly higher for US affiliates than non-US affiliates, they conclude that the import of IT services from the parent-company is a source of the productivity advantages of US affiliates in Germany.

Information risk, stock returns, and asset pricing: Evidence from China

2017 ◽  
Vol 30 (4) ◽  
pp. 379-394 ◽  
Author(s):  
Raheel Safdar ◽  
Chen Yan
Keyword(s):  
Stock Returns ◽  
Factor Model ◽  
Empirical Literature ◽  
Firm Level ◽  
Cross Sectional ◽  
Market Pricing ◽  
Content Type ◽  
Information Risk ◽  
Accruals Quality ◽  
Three Factor

Purpose This study aims to investigate information risk in relation to stock returns of a firm and whether information risk is priced in China. Design/methodology/approach The authors used accruals quality (AQ) as their measure of information risk and performed Fama-Macbeth regressions to investigate association of AQ with future realized stock returns. Moreover, two-stage cross-sectional regression analysis was performed, both at firm level and at portfolio level, to test if the AQ factor is priced in China in addition to existing factors in the Fama French three-factor model. Findings The authors found poor AQ being associated with higher future realized stock returns. Moreover, they found evidence of market pricing of AQ in addition to existing factors in the Fama French three-factor model. Further, subsample analysis revealed that investors value AQ more in non-state owned enterprises than in state owned enterprises. Research limitations/implications The study sample comprises A-shares only and the generalization of the findings is limited by the peculiar institutional and economic setup in China. Originality/value This study contributes to market-based accounting literature by providing further insight into how and if investors value information risk, and it seeks to fill gap in empirical literature by providing evidence from the Chinese capital market.

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