Please use this identifier to cite or link to this item
|title: ||Inside the entrepreneur's mind: an investigation of the perceived importance of public support for outward foreign direct investment|
|authors: ||Torres, M. M.|
Varum, C. A.
Ordered Probit Model
|issue date: ||2011|
|abstract: ||An interesting debate is now taking place among scholars and policy
makers about the value of public support for internationalization
activities. These incentives have been applied in many countries to
stimulate not only the exports but also foreign direct investments, but
the results are not clear. Governments must ensure that beyond the
increase of a country's competitiveness, public support also will promote
equity between rms.
Assuming that the perceived importance of public support is a proxy
of equity between rms, we have a scenario where the promotion of
equity can be obtained if the less skilled rms place more value on
support than rms with more competencies. In the same line of reasoning
and extending the analysis to the rm's external environment,
the equity increases if rms involved in more demanding environments
place more value on support than rms whose investments are in less
We propose an ordered probit model that considers the rms' competencies
and the requirements of foreign direct investments as sources
of variation for the evaluation of the perceived importance of public
support. This model is tested on four policy measures of a recent survey
that includes 104 Portuguese rms with foreign direct investment.
The overall results reveal that public support may promote equity since
rms' competencies have a negative e ect on the perceived importance
of public support, and the requirements of foreign direct investment
positively moderate the value assigned to public support.
We conclude that a non-uniform evaluation of public support may
roughly predict the promotion of equity through a positive discrimination
in favor of rms with less competencies and involved in more demanding projects of foreign direct investments.
Despite the use of representative sample, this study is exploratory and
has at least two limitations that prevent a generalization of the ndings.
The rst limitation is from the nature of the sample, which was
built with rms from a small country. We do not consider any spatial
di erences that could arise with the inclusion of rms from other
countries. The second limitation derives from the fact that the model
does not consider any time variation. The importance of public support
may change in di erent periods of time, e.g., during periods of
recession, public support may have more importance than in other periods.
We only can caught the e ect of support during a period of
Despite these limitations, the study could help to understand how entrepreneurs
assess public support and how public support can promote
equity between firms.|
|publisher version/DOI: ||http://www.eiba2011.org/|
|source: ||37th European International Business Academy (EIBA) Annual Conference|
|appears in collections||DEGEI - Comunicações|
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.