Abstract
ABSTRACTThis article applies “survival” analysis techniques to estimate and analyze the determinants of the initial outward foreign direct investment (OFDI) decision of manufacturing firms in India. Testing the self-selection hypothesis, semiparametric results based on both continuous and discrete-time hazard models support the hypotheses that firm size, total factor productivity, knowledge-based investments, export intensity, product differentiation, and cash flow are significantly related to early OFDI. Findings support the gradual internationalization process in which firms serve the foreign market via exports before engaging in OFDI. Controls for within-industry learning spillovers are found to be insignificant.
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