Multiproduct Multinationals and Reciprocal FDI Dumping

By Richard E. Baldwin, Gianmarco I. P. Ottaviano. 2001

156 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/eff34d7932abe28c4bf7f1c02ac0bdc12306b2f8

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Keith Head
2. J. Bergstrand
3. Peter H. Egger
4. Thierry Mayer
5. John Ries
6. D. Novy
7. Yoto V. Yotov
8. Mario Larch

In Strategy and Management

1. Keith Head
2. John Ries
3. Peter H. Egger
4. J. Bergstrand
5. Stefano Federico
6. Eiichi Tomiura
7. Karsten Olsen
8. Thierry Mayer

Citations in the corpus

• The Global Agglomeration of Multinational Firms (2014, unknown): “agglomeration kek(T ) agglomerationkek(T ) = ( m 1 d 1)firstnaturekek + ( m 2 d 2)IOlinkagekek + ( m 3 d 3)laborkek + ( m 4 d 4)capitalkek + ( m 5 d 5)knowledgekek + "ij ; (7)”
• A knowledge-and-physical-capital model of international trade flows, foreign direct investment, and multinational enterprises (2007, background): “However, the nature of trade in these models is “vertical,” nor horizontal; Baldwin and Ottaviano (2001) argue that the “intermediates augmented proximity-versus-scale model still has trade and FDI as substitutes” (p. 432).”
• Multi-Product Firms and Flexible Manufacturing in the Global Economy (2009, unknown): “0 (1 e) b0e @Xj @xj(i) 3 ) gives the output”
• The Determinants of Cross-Border Equity Flows (2005, unknown): “9 Baldwin and Ottaviano (1999) propose a model in which FDI induces complementary trade flows.”
• Exporting and FDI as Alternative Strategies (2004, background): “4 For evidence on the US and EU experiences see Belderbos (1997), Bloningen (1998), and Girma et al.”
• The Determinants of Cross-Border Equity Flows: The Geography of Information (2000, unknown): “7 Baldwin and Ottaviano (1999) propose a model in which FDI induces complementary trade flows.”