Comments by Joakim Gullstrand, on Internationalization of Indian Enterprises: Patterns, Determinants, and Policy Issues
Joakim Gullstrand: The role of the firm in the globalization process has been highlighted in both the empirical and the theoretical literature on international economics in the last two decades. The reason for stressing firms instead of industries and countries is that the lion's share of exports, imports, and FDI is formed by a handful of large firms seeking business partners and opportunities all over the world. When it comes to FDI, the outflow has been dominated by high income countries, but the share originating from developing economies has increased dramatically over the last decade and is today over 35 percent. The increasing importance of outward FDI as well as the increased role of developing economies (especially the large Brazil, Russia, India, and China [BRIC] economies) has spurred research about why firms become multinationals and where they invest. One under researched area is whether the policy used in the source country influences firms' decision when it comes to invest abroad, which Athukorala and Veeramani seek to remedy.
Asian Economic Papers