This paper contributes to the literature on the determinants of FDI. We use a new data set covering greenfield and expansion projects to examine which factors influence the decision to invest abroad. Our empirical framework is an augmented gravity model that incorporates elements of factor...

We develop a model in which multinational investors decide about the modes of organization, the locations of production, and the markets to be served. Foreign investments are driven by market-seeking and cost-reducing motives. We further assume that investors face costs of control that vary...

Empirical studies on the importance of control rights on efficiency are hindered by actual - presumably efficient - ownership patterns. Finding settings where the right owner does not own the right asset and where ownership arbitrarily changes is challenging. In this paper I aim at overcoming...

In this paper we analyze the conditions under which a foreign direct investment (FDI) involves a net capital flow across countries. Frequently, foreig direct investment is financed in the host country without an international capital movement. We develop a model in which the optimal choice of...

One of the theories widely discussed and used to explain the phenomenon of international production is the “eclectic paradigm” put forward by John Dunning. In this research note, some aspect of this theory/paradigm will be critically assessed or pointed to: the difficult and elusive jargon;...

This article reviews the state of the international trade literature on multinational firms. This literature addresses three main questions. First, why do some firms operate in more than one country while others do not? Second, what determines in which countries production facilities are...

A key feature of globalisation has been the growth and spread of multinational enterprises (MNEs), but there is here is considerable evidence that MNEs do not regard all locations as being equivalent. MNE activity both to and from peripheral economies differs from MNE activity associated with...