Multiproduct Multinationals and Reciprocal FDI Dumping / Richard E. Baldwin, Gianmarco I. P. Ottaviano.

Format:

Book

Author/Creator:

Baldwin, Richard E.

Contributor:

National Bureau of Economic Research.

Ottaviano, Gianmarco I. P.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6483.

NBER working paper series no. w6483

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1998.

Summary:

The global pattern of foreign direct investment (FDI) is quite similar to the world trade pattern. In particular, intraindustry FDI between rich nations is almost as pervasive as intraindustry trade among rich nations. In the standard' MNC model (of Markusen, Venables, Brainard, and others), FDI is driven by a tradeoff between proximity and scale, so firms typically supply the foreign market via exports or via FDI. The close correlation of two-way trade and investment flows is therefore difficult to explain with the standard model. We propose a model of multiproduct MNCs where firms simultaneously engage in intraindustry FDI and intraindustry trade.

Notes:

Print version record

March 1998.