FDI of German companies during globalization and deglobalization
FDI of German companies during globalization and deglobalization
Based on micro-level data of German companies from 1873 to 1927, we identified horizontal and vertical FDI applying a Knowledge-Capital model and analyzed individual FDI decisions. Our KC model revealed that market-driven FDI predominated; however, wage gaps and differences in human capital stimulated cost-driven FDI flows, which accounted for up to 10% of total FDI. On an individual level, large companies with high profitability conducted more FDI. Higher tariffs after WWI enhanced FDI, as companies could circumvent trade barriers – but declining openness reduced FDI. In spite of disintegration after WWI, the propensity to invest increased due to higher market concentration and firm specific investment patterns - albeit industry agglomeration effects were of minor importance.
fdi, globalization, protection, germany
247-270
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
Baten, Joerg
775dd62e-006f-43a0-a6f1-6623dc5e6ed1
Labuske, Kirsten
25123ce4-ed8d-4397-9b2d-00fe8314725a
April 2011
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
Baten, Joerg
775dd62e-006f-43a0-a6f1-6623dc5e6ed1
Labuske, Kirsten
25123ce4-ed8d-4397-9b2d-00fe8314725a
Kling, Gerhard, Baten, Joerg and Labuske, Kirsten
(2011)
FDI of German companies during globalization and deglobalization.
Open Economies Review, 22 (2), .
(doi:10.1007/s11079-009-9122-z).
Abstract
Based on micro-level data of German companies from 1873 to 1927, we identified horizontal and vertical FDI applying a Knowledge-Capital model and analyzed individual FDI decisions. Our KC model revealed that market-driven FDI predominated; however, wage gaps and differences in human capital stimulated cost-driven FDI flows, which accounted for up to 10% of total FDI. On an individual level, large companies with high profitability conducted more FDI. Higher tariffs after WWI enhanced FDI, as companies could circumvent trade barriers – but declining openness reduced FDI. In spite of disintegration after WWI, the propensity to invest increased due to higher market concentration and firm specific investment patterns - albeit industry agglomeration effects were of minor importance.
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FDI.doc
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Published date: April 2011
Keywords:
fdi, globalization, protection, germany
Identifiers
Local EPrints ID: 178423
URI: http://eprints.soton.ac.uk/id/eprint/178423
ISSN: 0923-7992
PURE UUID: ca9f5f8d-f6fa-49ad-a72b-0b317c235c41
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Date deposited: 25 Mar 2011 14:55
Last modified: 14 Mar 2024 02:46
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Author:
Gerhard Kling
Author:
Joerg Baten
Author:
Kirsten Labuske
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