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Determinants of the Choice of Foreign Direct Investment Modes: An Empirical Analysis of Multinational Enterprises in Kazakhstan

나원찬|Vitaliy Tsoy
한국이슬람학회 (Korean Association Of The Islamic Studies)|2022.10|한국이슬람학회논총 (Annals of Korean Association of the Islamic Studies)|제32권 제3호|pp. 205-248

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카자흐스탄Kazakhstan해외직접투자Foreign direct investmentforeign market entry modesforeign market entry mode choice해외시장진입해외시장 진입방식 선택
주제분류종교학

초록

Multinational enterprises (MNEs) have recently increased their presence in Kazakhstan, but research on their choice of foreign direct investment (FDI), a major form of entry, has not been sufficiently conducted despite its significance for firm strategy and the local economy. This study addresses the determinants of the choice of FDI modes by foreign firms in Kazakhstan, focusing on two major FDI modes, i.e., setting up a joint venture (JV) or a wholly owned subsidiary (WOS). Six hypotheses on how country-level factors affect MNEs’ choice between the two modes were established. Using secondary data on 187 firms from 41 countries operating in Kazakhstan as of 2019, a binomial logistic regression was conducted to test the hypotheses. The results show that a longer cultural distance, a higher corruption level, and a weaker economic relationship between home and host

Abstract

Multinational enterprises (MNEs) have recently increased their presence in Kazakhstan, but research on their choice of foreign direct investment (FDI), a major form of entry, has not been sufficiently conducted despite its significance for firm strategy and the local economy. This study addresses the determinants of the choice of FDI modes by foreign firms in Kazakhstan, focusing on two major FDI modes, i.e., setting up a joint venture (JV) or a wholly owned subsidiary (WOS). Six hypotheses on how country-level factors affect MNEs’ choice between the two modes were established. Using secondary data on 187 firms from 41 countries operating in Kazakhstan as of 2019, a binomial logistic regression was conducted to test the hypotheses. The results show that a longer cultural distance, a higher corruption level, and a weaker economic relationship between home and host

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