Strategic FDI and Industrial Ownership Structure

We argue that different industrial ownership structures generate different incentives for firms to engage in FDI. A comparison is made between (partially) cooperative structures such as the Japanese kieretsu and Korean chaebol systems and competitive structures such as U.S. firms. It is found that ownership structure has significant implications for the probability of initial FDI. Whether or not a cooperative structure is also coordinated turns out to be crucial in predicting FDI behaviour. This has further implications for the optimal FDI incentives of potential host countries and for how empirical studies might be designed