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Konrad, Kai A.; Lommerud, Kjell Erik (2001): Foreign direct investment, intra-firm trade and ownership structure. Papers / Department of Economics, University of Bergen
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Asymmetric information about true opportunity cost in trade between a multinational and its foreign affiliate can alleviate the hold-up problem in foreign direct investment. Selling shares in the affiliate to locals is also beneficial because it increase the parent multinational's information rent that is protected from a host government's confiscatory taxation.