Monitoring Costs and the Mode of International Investment

Our central proposition is that monitoring costs increase with physical distance, and hence, direct investments located further from the foreign investor’s home base should be more likely formed as joint ventures. Tests on a data set of Taiwanese direct investments in Mainland China provide robust support to the hypothesis. A project that was located 1000 kilometers further away was 13-17% more likely to be formed as a joint venture.

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Year of publication:	2002-08-25
Authors:	Lin, Chu-Chia S. ; Png, Ivan P.L.
Institutions:	EconWPA
Subject:	contract \| vertical integration \| opportunism \| international investment \| China

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Extent:	application/pdf
Series:	Industrial Organization.
Type of publication:	Book / Working Paper
Notes:	Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 26; figures: included 26 pages
Classification:	F3 - International Finance ; F4 - Macroeconomic Aspects of International Trade and Finance ; K - Law and Economics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005134453