Title: Global fixed capital investment by multinational firms
Authors: Belderbos, Rene ×
Fukao, Kyoji
Ito, Keiko
Letterie, Wilko #
Issue Date: 2013
Publisher: T. Fisher Unwin
Series Title: Economica vol:80 issue:318 pages:274-299
Abstract: We develop and test a model of the simultaneous determination of global gross fixed capital investments by multinational firms. We integrate a model of multi-product firms choosing optimal manufacturing locations with a model of dynamic investment optimization. Firms adjust capital stocks in each location in accordance with the expected marginal profitability of capital. Analysis of 1504 fixed capital investment decisions by Japanese multinational firms confirms the prediction that investment is not only determined by total factor productivity, effective demand, and wage levels in the host country, but also by wage levels in other countries in which the firm operates.
ISSN: 0013-0427
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Department of Managerial Economics, Strategy and Innovation (MSI), Leuven
× corresponding author
# (joint) last author

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