Ownership structure in foreign direct investment projects

Elizabeth Asiedu, Hadi Salehi Esfahani

Research output: Contribution to journalArticlepeer-review


This paper theoretically and empirically examines ownership structure in foreign direct investment (FDI) projects. We show that in choosing an ownership structure, foreign investors, local entrepreneurs, and government consider the specific, costly-to-market assets that the participants and the country bring to the project. In equilibrium, the foreign equity share rises with the importance of foreign investor assets and declines with the contribution of local assets towards the amount of surplus generated in the project. Government policies and the institutional structure of the country also affect ownership structure.

Original languageEnglish (US)
Pages (from-to)647-662
Number of pages16
JournalReview of Economics and Statistics
Issue number4
StatePublished - Nov 2001
Externally publishedYes

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics


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