Do Financing Constraints Matter for Outward Foreign Direct Investment Decisions? Evidence from India

Subash Sasidharan, Padmaja M

Research output: Working paperResearch

20 Downloads (Pure)


This study examines the role of financing constraints in explaining outward
FDI decisions using unique firm level panel data on Indian manufacturing
during the period 2007–2014. We consider the role of both internal finance
and external finance in firm decisions on outward FDI and employ instrumental variable probit model to examine financing constraints in outward FDI decisions of firms. Further, using count data models, we examine financing constraints in determining strategies regarding number of affiliates abroad. The study shows that firms with higher cash flow and liquidity are likely to have more number of foreign affiliates
Original languageEnglish
Place of PublicationFrederiksberg
PublisherAsia Research Centre. Copenhagen Business School
Number of pages37
Publication statusPublished - 2016
Externally publishedYes
SeriesCopenhagen Discussion Papers

Cite this