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Individual preferences toward inward foreign direct investment: A survey experiment

Author

Listed:
  • Tanaka, Ayumu
  • Ito, Banri
  • Jinji, Naoto

Abstract

In democratic societies, public attitudes toward foreign direct investment (FDI) can influence FDI policy as in other policy areas but have been largely ignored in FDI literature. To bridge this gap, we investigate individual preferences toward inward FDI. We employ a conjoint (vignette) survey experiment and analyze the determinants of preferences toward acquisitions by foreign firms. Conjoint survey experiments allow us to simultaneously estimate the effects of various attributes of foreign acquisitions, enabling us to analyze the complex causal relationships between various attributes of an acquisition project and people’s antipathy toward it. The results of the experiment show that the nationality of the foreign firm, reciprocity, and the economic conditions of the location of the firm being acquired are important factors. The subgroup analysis shows that older respondents and women are more negative about inward FDI. We also employ the gravity equation and confirm that our survey results are in line with the actual pattern of inward FDI stock.

Suggested Citation

  • Tanaka, Ayumu & Ito, Banri & Jinji, Naoto, 2023. "Individual preferences toward inward foreign direct investment: A survey experiment," Journal of Asian Economics, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:asieco:v:88:y:2023:i:c:s1049007823000647
    DOI: 10.1016/j.asieco.2023.101644
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    References listed on IDEAS

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    1. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    2. Henk L. M. Kox & Hugo Rojas‐Romagosa, 2020. "How trade and investment agreements affect bilateral foreign direct investment: Results from a structural gravity model," The World Economy, Wiley Blackwell, vol. 43(12), December.
    3. Andrew K. Rose, 2016. "Like Me, Buy Me: The Effect of Soft Power on Exports," Economics and Politics, Wiley Blackwell, vol. 28(2), pages 216-232, July.
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    More about this item

    Keywords

    Foreign direct investment; Foreign acquisition; Survey experiment; Gravity equation;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism

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