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Financial determinants of FDI

Publiceringsår: 2008
Språk: Engelska
Dokumenttyp: Working paper
Förlag: IFN Working Paper, No 741

Sammanfattning

We argue that mainstream FDI theory underplays financial motivations for international investment, and suggest several possible channels for a distinct cost-of-capital effect on FDI. Using a sample of European firms’ cross-border acquisitions, and controlling for traditional firm-level determinants of FDI, we find strong evidence in favor of a cost-of-equity effect, whereas the effect of debt costs is indeterminate. We further find that financial determinants are more important for firms originating in
relatively less financially developed countries and for firms with high knowledge intensity.

Disputation

Nyckelord

  • Business and Economics
  • FDI
  • cross-border acquisitions
  • investment-q
  • cost of capital
  • crosslisting
  • segmentation

Övriga

Unpublished

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