
Relative Access to Credit, Relative Wealth and FDI
Firm-Level Evidence from Japanese FDI into the United States
- Joseph D. Alba Peiming Wang Woon-Yee Ho
- 세종대학교 경제통합연구소
- Journal of Economic Integration
- 제22권 제2호
- 등재여부 : KCI등재
- 2007.06
- 231 - 255 (25 pages)
We use data on 317 Japanese firms to examine the effect of relative access to credit and relative wealth on the Japanese firm`s rate of foreign direct investment (FDI) in the United States. Using the zero-inflated negative binomial model, we find that multiple rating downgrades of a firm`s main bank significantly affected the Japanese firm`s rate of FDI in the United States. This result holds for firms with the highest 20% of bonds-to-liabilities ratio indicating that banking problems in Japan affected even firms who could have financed their FDI with bonds. We also find that the firm`s rate of FDI is affected by the firm`s relative wealth.
Ⅰ. Introduction
Ⅱ. Data on Japanese Firms and Model Specification
Ⅲ. Determinants of FDI
Ⅳ. Empirical Results
Ⅴ. Conclusions