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Ownership Structure in Foreign Direct Investment Projects

Elizabeth Asiedu1; Hadi Salehi Esfahani2

1 University of Kansas · 2 University of Illinois Urbana-Champaign

The Review of Economics and Statistics 2001 open access

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.

DOI
10.1162/003465301753237731
Volume
83 (4)
Pages
647-662
Language
en
Export
BibTeX
Sources
openalex crossref