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Comparing Sectoral FDI Incentives: Comparative Advantages and Market Opportunities
TL;DR: In this article, the authors examine the implications of comparative advantage for foreign direct investment (FDI) incentives and find that the host country's comparative advantage sector is more attractive to inward FDI than its comparative disadvantage sector.
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Abstract: In this paper we closely examine the implications of comparative advantage for foreign direct investment (FDI) incentives. Particularly, we find that the host country’s comparative advantage sector is more attractive to inward FDI than its comparative disadvantage sector. This finding is supported by empirical evidence. However, such a cross-sector FDI comparison has not been studied, theoretically and explicitly, in the literature. This paper contributes to the literature by filling this gap. We have also obtained some other results such as how the degrees of comparative advantage and absolute advantage affect FDI incentives, and whether a multinational corporation (MNC) should allow its foreign subsidiary to be run independently. c 2003 Peking University Press
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Citations
•Posted Content
Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries
TL;DR: In this article, a cross-country regressions for the period 1996-2008 indicate that there is a positive relationship between market size and FDI inflows, openness to trade has a positive impact on FDI flows, higher financial development has negative effect on foreign aid also goes, and agglomeration has a strong positive impact.
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Sectoral Location of FDI in China
Mi Lin,Yum K. Kwan +1 more
TL;DR: This paper investigated the determinants of FDI sectoral allocation in 29 China's manufacturing sectors from 2000 to 2007 and found that MNCs with ownership advantages tend to invest more in local high productivity sectors.
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•Dissertation
Essays on foreign direct investment, technology transfer and international trade : ricardian approaches and empirical evidence
Mohamed Saadi
- 19 Oct 2010
TL;DR: In this paper, the impact of foreign direct investment (FDI) on the terms of trade of the developing and emerging countries is investigated in the context of Ricardian trade.
24
References
•Book
An empirical assessment of the proximity/concentration tradeoff between multinational sales and trade
S. Lael Brainard
- 26 Aug 2011
TL;DR: The authors examined the extent to which multinational location decisions reflect a trade-off between achieving proximity to customers and concentrating production to achieve scale economies and found that overseas production by multinationals increases relative to exports and the higher are transport costs and trade barriers and the lower are investment barriers and scale economies at the plant level relative to the corporate level.
Factor movements and commodity trade as complements
TL;DR: In this paper, several models are presented in which factor mobility leads to an increase in the volume of world trade and share the common characteristic that the basis for trade is something other than differences in relative factor endowments.
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