The aim of the paper is to examine the determinants of the ownership choice (full, majority, minority) of manufacturing MNFs established in Greece and Portugal in the 1990s. FDI observations in the two countries underline differences between them in terms of relative FDI size and industry as well as ownership preferences. Transaction cost arguments together with bargaining power considerations provide the theoretical basis for the econometric model which uses multinomial logit analysis applied on 363 and 469 MNFs in Greece and Portugal. The estimations contribute to a better understanding of such differences, showing that location and industry characteristics through their effect on risk-adjusted expected profits influence ownership decisions.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2347.
Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure