Journal Press India^®

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The influence of outward foreign direct investment (OFDI) by emerging economy multinational enterprises (EMNEs) on the parent company and home economy are relatively under-researched areas. The OFDI-heterogeneity dimensions such as the ownership mode as wholly-owned subsidiary (WOS) or international joint venture (JV) - have received little attention in the empirical analysis. This study examines the firm-level determinants of exports by auto component companies in India. Considering the prior recent OFDI flows by the firm, we distinguish among the effects of having manufacturing-JV, manufacturing-WOS and non-manufacturing OFDI. Thus exploring the differential impact of JV versus WOS ownership mode of manufacturing abroad, adds to the limited literature on the effects of OFDI by OFDI-type.  Consistent with the expectation of greater capability building, the JV mode of overseas production is found to lead to relatively more exports by the investing firm. We also estimate the separate effects of magnitude of manufacturing and non-manufacturing OFDI flows.  

Keywords

OFDI; Exports from home; Emerging economy multinational enterprises; Manufacturing JVs; Ownership mode; Manufacturing OFDI

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