Firm Size and Determinants of Foreign Direct Investment

CERGE-EI Working Paper Series No. 135

25 Pages Posted: 18 Jan 2010 Last revised: 29 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)

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 1998

Abstract

This paper studies the locational determinants of foreign direct investment (FDI) by Japanese manufacturing firms in seven Asian countries by utilizing the 1993 survey data. I show that different size-groups of firms react to different factors in the host country in making the foreign investment decisions. Low labor cost and sufficient infrastructure encourage small firms to invest in a certain country while, for large firms, market size of the host country and strategic considerations (e.g. whether competitors invested in the country or not) are most important for their locational decisions. Overall, availability of cheap labor is not necessarily an important factor for Japanese FDI in Asia.

JEL Classification: F23, L60, O53

Suggested Citation

Kinoshita, Yuko, Firm Size and Determinants of Foreign Direct Investment (December 1, 1998). CERGE-EI Working Paper Series No. 135, Available at SSRN: https://ssrn.com/abstract=1538315 or http://dx.doi.org/10.2139/ssrn.1538315

Yuko Kinoshita (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States
202-623-5442 (Phone)
202-623-6069 (Fax)

University of Michigan, William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
146
Abstract Views
1,122
rank
31,888
PlumX Metrics