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Ownership Structure in Foreign Direct Investment Projects
Asiedu, Elizabeth Esfahani, Hadi Salehi
Asiedu, Elizabeth
Esfahani, Hadi Salehi
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Abstract
This paper theoretically and empirically examines ownership structure in foreign direct investment (FDI) projects. We show that in choosing an ownership structure, foreign investors, local entrepreneurs, and government consider the specific, costly-to-market assets that the participants and the country bring to the project. In equilibrium, the foreign equity share rises with the importance of foreign investor assets and declines with the contribution of local assets towards the amount of surplus generated in the project. Government policies and the institutional structure of the country also affect ownership structure.
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This is the publisher's version, also available electronically from http://www.mitpressjournals.org/doi/abs/10.1162/003465301753237731#.VMKObnvGp40.
Date
2001-03-13
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Massachusetts Institute of Technology Press
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Asiedu, Elizabeth; Esfahani, Hadi Salehi. (2001). "Ownership Structure in Foreign Direct Investment Projects." Review of Economics and Statistics, 83(4):647-662. http://www.dx.doi.org/10.1162/003465301753237731