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NO. 264 报告人:朱爱勇

——主题:Quantifying Adaptation Costs in Sequential FDI Location Choices: Evidence from German Firms

编辑:系统管理员时间:2016-10-17访问次数:673

 

 目:Quantifying Adaptation Costs in Sequential FDI Location Choices: Evidence from German Firms

报告人:朱爱勇     助理教授  武汉大学

主持人:罗德明  教授   浙江大学经济学院

时  间:2016年10月21日   星期五   13:30-15:00

地  点:浙大玉泉校区经济学院418室

 

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Abstract

When engaging in foreign direct investment (FDI) for the first time, multinational firms often incur large costs. They have to adapt to different business practices, ethical norms and regulations in a new country. Therefore, prior investment experience in a location can influence firms' FDI decisions in subsequent periods, since firms do not need to pay the adaptation costs if they invest in the same location again. In this context, I develop a dynamic structural model of how firms make sequential decisions of where to invest. Using data on German firms' FDI from 2002 to 2009, I estimate the model allowing for country-specific adaptation costs and firms' heterogeneous preference towards location attributes. Estimation results suggest that adaptation costs are statistically and economically significant, ranging from 0.9%-22.4% of the average expected discounted profit of a firm. If adaptation costs were subsidized completely, firms' FDI location choices would change dramatically. In addition, the average expected discounted profit would increase by 10.9%, not only due to the reduction of adaptation costs, but more importantly, due to a better matching between firms and locations.

 

CRPE秘书处

2016-10-17