Abstract
Although an increasing number of MNEs has been reported to engage in outbound FDI as means for tax breaks, against trade friction, and/or for financial hedge in foreign countries, abundant studies have still focused on the ‘conventional’ forms of outbound FDI only that are to search for (1) resources, (2) new markets, and/or (3) strategic assets from foreign countries. This study attempts to fill this gap by investigating the impetus and consequences of MNEs’ ‘non-conventional’ forms of outbound FDI. Using a sample of 3,343 subsidiaries established by 706 Japanese parent companies operating in 61 countries over the period of 1996-2010, the study investigates the characteristics of MNEs’ non-conventional outbound FDI (1) for tax breaks, (2) against trade friction, and (3) for financial hedge, and examines their impact on the domestic employment hired by parent MNEs at home. Our 3SLS estimation results show that the impacts of Japanese MNEs’ non-conventional outbound FDI on MNE home employment vary across different forms of motivations.
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