A signalling model of firms' foreign direct investment relocation decision

• Tipo: Artigo em Revista Científica Internacional
• Data: 2008

Autores

Forte, R (Autor) FEP; Brandao, A (Autor) FEP

Revista

Título: International Journal of the Economics of Business

Vol. 15 Nº 3

Páginas: 339-357

ISSN: 1357-1516

Editora: Taylor & Francis

Indexação

ISI Web of Knowledge

Scopus - 0 Citações

Outras Informações

ID Authenticus: P-007-P1Y

DOI: 10.1080/13571510802465112

Abstract (EN): We analyse whether the foreign government can influence the multinational firm's relocation decision, through signalling the amount of subsidy it can grant. The foreign country is one of two possible types which differ on their investment conditions. Comparing the results obtained with an adverse selection model (the government knows the country type but the firm does not) with the results of a signalling model, we conclude that relocation is more likely, and the necessary subsidy is smaller, in the signalling model than with adverse selection. This can explain the proliferation of Investment Support Agencies worldwide.

Idioma: Inglês

Tipo (Avaliação Docente): Científica