Working Paper: CEPR ID: DP2347
Authors: Natalia Barbosa; Helen Louri
Abstract: The aim of the paper is to examine the determinants of the ownership choice (full, majority, minority) of manufacturing MNFs established in Greece and Portugal in the 1990s. FDI observations in the two countries underline differences between them in terms of relative FDI size and industry as well as ownership preferences. Transaction cost arguments together with bargaining power considerations provide the theoretical basis for the econometric model which uses multinomial logit analysis applied on 363 and 469 MNFs in Greece and Portugal. The estimations contribute to a better understanding of such differences, showing that location and industry characteristics through their effect on risk-adjusted expected profits influence ownership decisions.
Keywords: multinationals; ownership structure
JEL Codes: F23; L22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| firm size (L25) | full ownership (H13) |
| profitability (L21) | ownership decisions (R21) |
| growth rates (O40) | ownership decisions (R21) |
| firm size (L25) | ownership choices (R21) |
| labor costs (J30) | ownership choices (R21) |
| geographical proximity (R12) | full ownership (H13) |