International Trade and Factor Mobility: An Empirical Investigation / Linda S. Goldberg, Michael W. Klein.

Format:

Book

Author/Creator:

Goldberg, Linda S.

Contributor:

National Bureau of Economic Research.

Klein, Michael W.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7196.

NBER working paper series no. w7196

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

International Trade and Factor Mobility

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

Foreign Direct Investment (FDI) has been growing rapidly, at a pace far exceeding the growth in international trade. Thus, a full understanding of the relationship between trade in goods and FDI is important for obtaining a complete picture of the extent and sources of international linkages. We investigate whether FDI serves as a complement to trade or a substitute for trade based on the effects identified by the Rybczynski theorem whereby an increase in a factor of production used intensively in one sector affects production both in that sector and in other sectors. Using detailed data on bilateral capital and trade flows between the United States and individual Latin American countries, we examine the linkages between FDI into particular sectors of Latin American economies and the net exports of those and other manufacturing sectors. We find that FDI from the United States can lead to significant, and varied, shifts in the composition of activity in many Latin American countries and across many manufacturing industries.

Notes:

Print version record

June 1999.