How do corporate governance model differences affect foreign direct investment in emerging economies?

This study examines the impact of national corporate governance models on inward foreign direct investment (FDI) in emerging economies. We consider three potential mechanisms, and conduct an empirical test of how family ownership and control in large group-affiliated firms in Taiwan affect joint venture investment from US and Japanese firms during the period 1988–1998. Results support the neo-institutional perspective of FDI developed in this study: the home-country corporate governance models are likely to shape foreign firms’ choice of local partners.