Publication

This paper analyzes foreign direct investment related ownership choices and their relation to host country characteristics and indicators of transaction costs. To do this, it uses count data on Indian joint ventures (JVs) and wholly-owned subsidiaries (WOS). The authors’ analysis shows only minimal support for the view that JVs should be more likely if the host countries are attractive in terms of market access or resource endowments. It also demonstrates that geographical and cultural distances have ambiguous effects on the choices between JVs and WOS. Finally, it suggests that there are usually more WOS when investment risks are contained by bilateral treaties and better control of corruption.