FMNEFully Mixed Nash Equilibrium
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The exit propensity might also depend on the nature of FDI involved: if FDI is horizontal--which occurs when a firm duplicates its home country-based activities at the same value chain stage as in the host-country--then FMNEs may be less likely to close plants since they serve a target market.
In this context, FMNEs may have a higher probability of survival because on the one hand foreign capital participation may itself be signalling unobserved quality of the affiliate firm (cherry-picking hypothesis), and/or on the other, it may be a vehicle for access to more advanced foreign technologies and, therefore for improving firm efficiency.
Bandick (2010) further suggests that FMNEs and export active plants have higher survival rates than both domestic non-exporting firms and DMNEs.
Therefore, it is reasonable to expect different effects of FMNE presence on indigenous Chinese firms with different ownership.
Although there are already numerous studies on FDI productivity spillovers in China, how FMNE presence (HMT and Other FMNE presence) simultaneously influences indigenous firms' domestic sales and exports as a whole or as separate groups (i.
3 FMNE Presence and Indigenous Firms' Exports and Domestic Sales
The financial income of FMNEs is derived almost entirely from
reality in which (1) FMNEs have only financial income (meaning income
states that tax authorities should allocate functions to FMNE branches
It further mentions that this asset allocation would reflect the relative share of each branch in overall FMNE income.
This pattern of FMNE activity differs from Aharoni's (1966).
Since no comprehensive data sources about FMNE entry to Israel existed, the identification of FMNEs in Israel was a major effort of this study.