Rossitza B. Wooster

Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis

This paper reviews the empirical literature on technology spillovers from foreign direct investment (FDI) in developing countries. Our meta-analysis uses a sample of 32 studies to determine what aspects of study design and data characteristics explain the magnitude, significance, and direction of spillovers from FDI. Results suggest that spillover effects are more pronounced when studies measure the effect of FDI spillovers on output, and are more likely to be significant and positive for Asian countries. Results also highlight the possibility that the documented spillover effects from FDI in developing countries may be partly a product of model misspecification.

Strategic investments by US firms in transition economies

Studies in international business have considered both theoretical and empirical analyses of investment strategies by multinational firms in transition economies. However, there is scant research on the impact of firm-specific factors on the likelihood, timing, and mode-of-entry decisions in these economies. We provide evidence on three aspects of the strategic decisions by US firms to invest in transition economies. First, we find that firms entering the region have greater advertising intensity and sales growth than industry peers that did not enter the region, suggesting that market-seeking considerations motivate expansion. Second, we find that earlier entry is undertaken by firms with fewer industry competitors and higher sales growth, suggesting that the desire to secure market share ahead of competitors motivates entry timing. Finally, we investigate the choice of entry mode into the region, and find that firms from concentrated industries are more likely to enter the region with high-equity commitment, consistent with market-seeking motives. We also find that firms incorporate the degree of progress with market-oriented reforms in making decisions concerning entry timing and mode. Journal of International Business Studies (2008) 39, 249–266. doi:10.1057/palgrave.jibs.8400334

The Contribution of Intra-Regional and Extra-Regional Trade to Growth: Evidence from the European Union

In this paper, we assess whether trade among member countries of a regional trade agreement (intra-regional trade) contributes more to output growth than trade with nonmember countries (extra-regional trade). We use Granger causality tests to evaluate the trade-growth relationship in 13 countries from the European Union and separately estimate the differential impact of the two kinds of trade on economic growth over the period 1980-2003. In addition to the basic influences of investment and population growth, we find that intra-regional trade has had a lesser impact on growth in output per capita than extra-regional trade by almost 30%.

Equity Commitment under Uncertainty: A Hierarchical Model of Real Option Entry Mode Choices

We develop a hierarchical model of real option entry mode choices under environmental uncertainty and test predictions using a unique sample of U.S. companies expanding in the countries of Latin America and the Caribbean between 1980 and 2005. Our results, based on a probit estimation with sample selection, show that country risk has a significant and negative effect at the primary level of the hierarchy. Sensitivity analysis further distinguishes between which entry modes dive our main results. Taken collectively, our findings suggest that prior acquisition experience, marketing intensity, size, as well as a higher proportion of specific or intangible assets, are key attributes for managers to consider when structuring foreign investments as a portfolio of options. Moreover, we find that international investment experience moderates the extent to which firm capabilities matter by weakening the predicted effects of prior acquisition experience and asset structure when firms make choices regarding equity commitment.

Crowdfunding as a Social Movement: The Determinants of Success in Kickstarter Campaigns

Crowdfunding, which can be loosely defined as raising capital through small contributions from a large numbers of investors, is an increasingly popular practice among entrepreneurs. Kickstarter, the largest crowdfunding platform, uses an “all or nothing” approach: projects must reach their funding goal within a set time period before any money can be allocated. Therefore, it is in the interest of project creators to understand the determinants of success before the funding period begins. Models of social movements indicate that when conformity is a concern, high initial participation can lead to herding behavior. In contrast, if backers are only interested in a project’s success, then others’ contributions will encourage free riding. Results based on data collected daily from two months of Kickstarter projects show that funds raised in the first day of a campaign are positively related to the percentage of the funding goal raised at the campaign’s end. However, when controlling for a project’s total backers, first day backers are negatively associated with measures of success.

The Effects of U.S.-China Trade on Employment and Wages in the U.S.-Mexico Border Region

This paper investigates the impact of foreign competition from China on employment and wages in four U.S.-Mexico border counties: Santa Cruz, AZ, San Diego, CA, El Paso, TX, and Webb, TX. Using disaggregated industry-level data between 1992 and 2006, we find that increased trade with China is associated with significantly lower county-industry employment and wages. In contrast, and as expected, increased imports from Mexico are positively related to increased employment and wages in U.S. Mexico border counties. The results indicate that the U.S.-Mexico supply-chain relationship related to the maquiladora industry is significantly affected by Chinese competition. Implications for policy include an increased focus on federal programs that are intended to diversify the border economy.

A geographic view of expansion choices by U.S. firms in China

abstract How does geography matter for explaining the location patterns of U.S. companies in China? We combine insights from the literature on economic geography and spatial interdependence in foreign direct investment (FDI) activity to provide a comparative analysis using both sectoral regression results and maps that illustrate patterns in the data. We use a unique sample of publicly traded U.S. firms that announced expansion of operations into China between 1980 and 2005. Regression results show that, relative to the tertiary sector, firm characteristics matter more for primary sector firms, whereas province characteristics matter more for secondary sector firms. Additionally, our GIS analysis reveals a high level of locational concentration and differences in provincial characteristics over time. Overall, we find that combining GIS methods with FDI data can provide a richer picture of economic activity that is highly accessible to both academics and practitioners.

An Empirical Analysis of Risk Factors in Aviation: Evidence from 1995-2016 NTSB Data

At the beginning of the 20th Century, people endeavored into the skies for the first time. While this once audacious pursuit has become commonplace in 21st Century life, the safety of air travel has come at the expense of many aircraft accidents and incidents. Aviation safety analysis is traditionally retroactive, as new policies, procedures, practices, and regulation are driven by these accidents and incidents. The United States Federal Aviation Administration (FAA) is currently advocating a more proactive approach to aviation safety wherein certain factors, whether they be environmental, mechanical, human, or some combination thereof are analyzed in order to identify the level of risk of an operation. The intent of this paper is to demonstrate two models by which risk analysis can be conducted using data that contains external factors and the outcome of the flight.

Crime, Institutions and Sector-Specific FDI in Latin America

This article looks at the impact of crime and institutions on FDI into Latin America and the Caribbean during the 1996-2010 period. FDI is disaggregated into primary, secondary and tertiary sectors and three variables related to violent crime are used: homicides, crime victimization, and organised crime. We find that the significance of institutions disappears with the presence of crime. The impact of crime on FDI depends on the sector and types of crime considered. Higher homicide rates are associated with less FDI in the secondary while organised crime reduces tertiary sector FDI. Crime victimization has a significant negative impact on the tertiary and in some estimations of the secondary sector. Crime has no impact on primary sector FDI.

Leadership positioning among U.S. firms investing in China

This study investigates leadership positioning by U.S. firms in China using the awareness, motivation, capability (AMC) perspective. We define leadership as first in industry to invest in China, and find that leaders have characteristics associated with higher AMC, evidenced by pre-existing multinational experience, higher product market orientation, smaller scale of operations, and higher input cost structure. Notably, the motivation to lower input costs and the prior capability in multinational operations mattered only for the first wave of firms leading industry investment earlier in time, while firms with smaller scale of operations exhibited a preference to lead investment in less popular provinces. Overall, these results provide a unique view on how AMC characteristics influence international investment decisions, suggesting that firms both strategically lead and strategically follow. In additional analysis, we examine how leaders and followers positioned themselves with respect to ownership, and find that leaders were more likely to choose entry modes that offered ownership control over flexibility, consistent with internalization theories.