Finance-specific factors as drivers of cross-border investment - An empirical investigation
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In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment activity. The hypothesis is tested in a series of binary-response models, using a sample of 1379 European non-financial firms' international acquisitions. Controlling for traditional firm- and target-country-specific foreign direct investment (FDI) determinants, we find strong evidence that financial factors play a significant role in explaining cross-border investment. We conclude that without explicit consideration of the financial dimension, firms' FDI decisions cannot be properly understood. (C) 2008 Elsevier Ltd. All rights reserved.
Ämnesklassifikation (UKÄ) – OBLIGATORISK
|Tidskrift||International Business Review|
|Status||Published - 2008|
|Peer review utförd||Ja|