Are Investment Promotion Agencies Effective in Promoting Outward Foreign Direct Investment? The Cases of Japan and Korea1. Issue 2 (June 2014)

• Record Type: Journal Article
• Authors: Hayakawa, Kazunobu; Lee, Hyun‐Hoon; Park, Donghyun
• Is Part Of: Asian economic journal. Volume 28:Issue 2(2014:Jun.)
• Page Start: 111
• Page End: 138
• Publication Date: 2014-06
• Subjects: Asia -- Economic conditions -- 1945- -- Periodicals; 330.95
• DOI: 10.1111/asej.12030
• Languages: English
• ISSNs: 1351-3958

Abstract

<abstract abstract-type="main"> <title> <x xml:space="preserve">Abstract</x> </title> <p>In this paper we examine the role of investment promotion agencies (IPA) in promoting outward foreign direct investment (FDI) from Japan and Korea. Looking at two home countries enables us to control for both country‐pair time‐invariant characteristics and host‐country time‐varying characteristics. Our empirical results suggest that home‐country IPA tend to be more effective in promoting outward FDI in politically risky host countries. However, this finding depends on whether the home‐country firm is listed or unlisted. More specifically, we find that the positive effect of home‐country IPA on outward FDI in politically risky countries is limited to unlisted home‐country firms, which tend to be less productive.</p> </abstract>