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FDI of German companies during globalization and deglobalization

Kling, Gerhard, Baten, Joerg and Labuske, Kirsten (2011) FDI of German companies during globalization and deglobalization Open Economies Review, 22, (2), pp. 247-270. (doi:10.1007/s11079-009-9122-z).

Record type: Article


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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Published date: April 2011
Keywords: fdi, globalization, protection, germany


Local EPrints ID: 178423
ISSN: 0923-7992
PURE UUID: ca9f5f8d-f6fa-49ad-a72b-0b317c235c41

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Date deposited: 25 Mar 2011 14:55
Last modified: 18 Jul 2017 12:04

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Author: Gerhard Kling
Author: Joerg Baten
Author: Kirsten Labuske

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