Private information for foreign investment in emerging economies

Yuko Kinoshita, Ashoka Mody

Research output: Contribution to journalArticlepeer-review

36 Scopus citations

Abstract

In previous studies it has been found that new foreign investment is significantly related to the stock of existing investment in the country/region. This paper's contribution is the finding that a Japanese firm's new investment in an emerging economy is positively correlated with its own previous investment in that economy and also with the current/planned investments by competitors. These two channels are primarily substitutes; that is, investment by competitors becomes less salient when the firm has experience in the market. The correlated behaviour is not explained by industrial agglomerations but appears to reflect the value of private information to investment in emerging economies.

Original languageEnglish (US)
Pages (from-to)448-464
Number of pages17
JournalCanadian Journal of Economics
Volume34
Issue number2
DOIs
StatePublished - 2001
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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