Lucie Adenaeuer is at the Institute for Food and Resource Economics at the University of Bonn, Germany. E-mail: lucie.adenaeuer@ilr.uni-bonn.de for correspondence. Thomas Heckelei is also at the Institute for Food and Resource Economics at the University of Bonn, Germany. The authors thank two anonymous reviewers for their helpful comments on an earlier draft of this article.
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Foreign Direct Investment and the Performance of European Agribusiness Firms
Article first published online: 15 APR 2011
DOI: 10.1111/j.1477-9552.2011.00300.x
© 2011 The Agricultural Economics Society
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How to Cite
Adenaeuer, L. and Heckelei, T. (2011), Foreign Direct Investment and the Performance of European Agribusiness Firms. Journal of Agricultural Economics, 62: 639–654. doi: 10.1111/j.1477-9552.2011.00300.x
Publication History
- Issue published online: 6 AUG 2011
- Article first published online: 15 APR 2011
- (Original submitted October 2009, revision received April 2010, accepted February 2011.)
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Keywords:
- European agribusiness firms;
- foreign direct investment;
- performance characteristics
- D22;
- F23;
- L25;
- L66;
- Q13
Abstract
This article analyses the relationship between foreign direct investment and the performance of European agribusiness firms. Motivated by the role of heterogeneous firms in new trade theory and using a firm-level dataset, statistical analyses identify key differences between firms investing in foreign economies and those that do not. A binary choice model quantifies the relationship between firm characteristics and the decision to engage in foreign investment. Size and – less strongly – productivity are greater for multinationals relative to domestic firms. Furthermore, European multinationals are characterised by a larger debt to equity ratio and show lower labour and input costs.