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Full-Text Articles in Business
National Income Inequality And International Business Expansion, Nathaniel C. Lupton, Guoliang Frank Jiang, Luis F. Escobar, Alfredo Jiménez
National Income Inequality And International Business Expansion, Nathaniel C. Lupton, Guoliang Frank Jiang, Luis F. Escobar, Alfredo Jiménez
Faculty Publications
We examine the extent to which host country income inequality influences multinational enterprises’ (MNE) expansion strategy for foreign production investment, depending on their specific strategic objectives. Applying a transaction cost framework, we predict that national income inequality has an inverted U-shaped relationship with foreign production investment. As inequality increases, MNEs accrue lower transaction costs arising from interactions with various local actors, leading to higher probability of investment. As income inequality increases further, its effect on location attractiveness will become negative, as its attraction effect is increasingly offset by additional monitoring, bargaining, and security costs owing to the more fractious nature …
U.S. Fdi And Shareholder Rights Protection In Developed And Developing Economies, Vishaal Baulkaran, Nathaniel C. Lupton
U.S. Fdi And Shareholder Rights Protection In Developed And Developing Economies, Vishaal Baulkaran, Nathaniel C. Lupton
Faculty Publications
We examine the impact of shareholder rights protection on U.S multinational firms’ Foreign Direct Investments (FDI). We hypothesize that the expropriation of wealth is less likely to occur in countries with strong shareholder rights and hence, these countries will attract more FDI relative to countries with weaker shareholder rights protection. We also hypothesize that this relationship will be more important for developing countries compared to developed countries. Based on an analysis of US FDI data over the period 1997-2016, we find support for our predictions. These findings emphasize the importance of institutional development for economic development, via the attraction of …