Working Paper No. 1041

Foreign Direct Investment, Source Country Heterogeneity and Management Practices

Published: September 25, 2014, revised February 2016Pages: 72Keywords: Multinational firms; FDI; Management practices; Firm performanceJEL-codes: F21; F23; L10; M10

Foreign Direct Investment, Source Country Heterogeneity and Management Practices Fredrik Heyman, Pehr-Johan Norbäck and Rickard Hammarberg

This paper examines whether and, if so, why source country heterogeneity exists in foreign direct investments. Using detailed data on all Swedish firms for the period from 1996 to 2009, we find statistical evidence that affiliate performance differs systematically across source countries.

We show that differences in foreign MNEs’ global management practices (estimated from the new firm-level data from the World Management Survey) explain about a third of the observed source country variation in productivity among foreign affiliates.

We also show how different source country characteristics – through their impact on MNEs’ global management practices – affect affiliate productivity in a host country.  


Fredrik Heyman


Ph: +46 8 665 4537

Pehr-Johan Norbäck


Ph: +46 8 665 4522
Mob: +46 73 547 3379

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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