A decomposition of factors influencing horizontal and vertical FDI: A separate analysis

Kazuhiko Yokota, Akinori Tomohara

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

While the literature has explored which factors determine the emergence of different multinational enterprise (MNE) structures (i.e., horizontal or vertical MNEs), little attention has been paid to differences within the same MNE type. This paper proposes an index to distinguish horizontal foreign direct investment (FDI) from vertical FDI and tries to identify different FDI motivations within the same MNE type. The analysis indicates that industry type, FDI destinations, and the interaction of the two play an important role in determining MNE structures. Our analysis uncovers interesting FDI patterns from data and obtains a more nuanced typology of the US multinational affiliate activities.

Original languageEnglish
Pages (from-to)462-478
Number of pages17
JournalEastern Economic Journal
Volume35
Issue number4
DOIs
Publication statusPublished - 2009

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ASJC Scopus subject areas

  • Economics and Econometrics

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