2006–2010

Finance-specific Factors as Drivers of Cross-border Investment – An Empirical Investigation

Reprint No. 2008:35

Author(s): Jens Forssbæck and Lars OxelheimYear: 2008 Title: International Business Review Volume (No.): 17 (6) Pages: 630–641

In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment activity. The hypothesis is tested in a series of binary-response models, using a sample of 1379 European non-financial firms’ international acquisitions. Controlling for traditional firm- and target-country-specific foreign direct investment (FDI) determinants, we find strong evidence that financial factors play a significant role in explaining cross-border investment. We conclude that without explicit consideration of the financial dimension, firms’ FDI decisions cannot be properly understood.

Reference:
Forssbæck, Jens and Lars Oxelheim (2008), "Finance-specific Factors as Drivers of Cross-border Investment – An Empirical Investigation". International Business Review 17(6), 630–641.

Lars Oxelheim

Contact

Ph: +46 8 665 4527
Mob: +46 70 861 9361
lars.oxelheim@ifn.se

Interdisciplinary European Studies

The European Union and the Return of the Nation State

9783030350048_200x_the-european-union-and-the-return-of-the-nation-state.jpg

This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book

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