Private and Public Information for Foreign Investment Decisions

CERGE-EI Working Paper Series No. 150

25 Pages Posted: 14 Jan 2010

See all articles by Yuko Kinoshita

Yuko Kinoshita

International Monetary Fund (IMF); University of Michigan, William Davidson Institute; Centre for Economic Policy Research (CEPR)

Ashoka Mody

International Monetary Fund (IMF) - Research Department

Date Written: November 1, 1999

Abstract

Previous studies have found that foreign direct investment is significantly related to the stock of existing investment in the area. The present paper makes an additional contribution by providing evidence that investment decisions are positively correlated to the firm’s own previous investment in the area as well as to the current/planned investments by competitors. In addition, it is found that these two channels are primarily substitutes, i.e., investment by competitors comes less important when the firm already has experience in the market. The results are statistically significant and robust to various changes in model specification.

Suggested Citation

Kinoshita, Yuko and Mody, Ashoka, Private and Public Information for Foreign Investment Decisions (November 1, 1999). CERGE-EI Working Paper Series No. 150, Available at SSRN: https://ssrn.com/abstract=1535901 or http://dx.doi.org/10.2139/ssrn.1535901

Yuko Kinoshita (Contact Author)

International Monetary Fund (IMF) ( email )

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University of Michigan, William Davidson Institute

724 E. University Ave.
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United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Ashoka Mody

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-9617 (Phone)
202-589-9617 (Fax)

HOME PAGE: http://www.amody.com

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