Fredrik Heyman (Associate Professor)
Institution: Research Institute of Industrial Economics (Stockholm)
This paper examines whether and, if so, why source country heterogeneity exists in foreign direct investment. Using detailed data on all Swedish firms for the period from 1996 to 2009, we find statistical evidence that affiliate performance differs systematically across source countries. We show that differences in foreign MNEs’ global management practices (estimated from the new firm-level data from the World Management Survey) explain about a third of the observed source country variation in productivity among foreign affiliates. We also show how different source country characteristics – through their impact on MNEs’ global management practices – affect affiliate productivity in a host country.