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Title: Essays on firm level investment
Author: Araujo, Sonia
ISNI:       0000 0004 2727 2268
Awarding Body: University of Essex
Current Institution: University of Essex
Date of Award: 2012
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This thesis collects three empirical essays on firm level investment. The first two empirical chapters aim at making a contribution in understanding a particular feature of foreign direct investment: the concentration of investment in a given country at a specific point in time. We raise the hypothesis that this feature might be explained by herd behaviour, that is, faced with incomplete information about the business conditions of alternative foreign locations, firms copy recent location decisions made by previous investors. In chapter two I devise a strategy to identify herd effects and assess its contribution in explaining the observed pattern of investment location. Using a sample of Swedish multinational enterprises, and controlling for other sources of information about the attractiveness of alternative locations, such as the firm's own experience of different host countries business conditions through past investments, I find that the pattern of location choices is consistent with the herding hypothesis. In the third chapter, I test the herding hypothesis further by replacing location specific dummies with variables that relate to readily and publicly available information on host countries' characteristics and hence likely to enter in the firm's information signal. The econometric analysis shows that the coefficient of the variable accounting for herd effects is robust to the inclusion of other variables affecting location choice. The fourth chapter studies the impact of several features of the regulatory environment on firm-level investment. The analysis focus on four industries which have traditionally been heavily regulated but have undergone a process of regulatory reform. I construct a large panel of firms in OECD countries operating in the electricity, gas, telecommunications and railways sectors. The main contribution of the paper to the existing literature is the finding that the impact of regulation on investment is both sector and firm specific.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available