nep-ppm New Economics Papers
on Project and Portfolio Management
Issue of 2007‒01‒02
one paper chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Firm-Specific Characteristics and the Timing of Foreign Direct Investment Projects By Horst Raff; Michael Ryan

  1. By: Horst Raff; Michael Ryan
    Abstract: This paper uses a proportional hazard model to study foreign direct investment by Japanese manufacturers in Europe between 1970 and 1994. We divide each firm’s investment total into a sequence of individual investment decisions and analyze how firm-specific characteristics affect each decision. We find that total factor productivity is a significant determinant of a firm’s initial and subsequent investments. Parent-firm size does not have a significant influence on the initial decision to invest. Large firms simply have more investments than smaller firms. Other firm-specific characteristics, such as the R&D intensity, export share and keiretsu membership, also play a role in the investment process.
    Keywords: foreign direct investment, productivity, hazard model, Japan, keiretsu
    JEL: F23 L20
    Date: 2006

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