Merger and acquisition FDI,relative wealth and relative access to bank credit: Evidence from a bivariate zero-inflated count model |
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| Authors: | Woon-Yee Ho Peiming Wang Joseph D Alba |
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| Institution: | 1. Department of Insurance, Tamkang University, New Taipei City, Taiwan, No. 151, Yingzhuan Rd., Tamsui Dist., New Taipei City 25137, Taiwan, ROC;2. Safeco Distinguished Professor of Insurance, Department of Finance and Management Science, Washington State University, P.O. Box 644746, Pullman, WA 99164-4746, United States;3. Department of Finance, Feng Chia University, Taichung, Taiwan, No. 100, Wenhwa Rd., Seatwen, Taichung 40724, Taiwan, ROC |
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| Abstract: | We use a bivariate zero-inflated negative binomial model to examine Japanese merger and acquisition (M&A) FDI jointly with other types of Japanese FDI (or non-M&A FDI) into the United States. We find that for firms likely to engage in FDI, their rates of FDI are affected by the financial health of their main banks. However, only the rate of M&A FDI is affected by relative wealth. The rate of non-M&A FDI is affected by profitability and firm size. Our findings show the importance of distinguishing M&A FDI from non-M&A FDI and of considering the two types of FDI jointly. |
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