Working Paper: NBER ID: w2987
Authors: Magnus Blomström; Mario Zejan
Abstract: This paper uses a model of dichotomous choice to distinguish the characteristics of Swedish multinational firms that seek out joint ventures from those that do not. The findings suggest that firms with little experience of foreign production and highly diversified product lines are the most likely to share equity. In general, it is found that multinational firms that have the most to offer the developing countries are reluctant to enter into joint venture agreements. Therefore, imposing joint-venture status on multinationals may prevent the inflow of advanced technologies.
Keywords: multinational firms; joint ventures; foreign investment; technology transfer
JEL Codes: F23; L24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Limited experience in foreign production (F29) | preference for joint ventures (L24) |
| Highly diversified product lines (L68) | preference for joint ventures (L24) |
| Higher R&D expenditures (O39) | greater likelihood of insisting on full control over foreign affiliates (F23) |
| More experience in foreign operations (F59) | preference for majority ownership (G32) |
| Larger host country market (F29) | inclination towards joint ventures (L24) |