Export-Platform FDI : Cannibalization or Complementarity?

Pol Antràs, Evgenii Fadeev, Teresa C. Fort, Felix Tintelnot

We develop a model of export-platform foreign direct investment (FDI) in which final goods are produced only with labor and there are no fixed costs of exporting. We derive a simple condition that determines whether an MNE's plants are substitutes or complements. This condition is shaped by the relative size of (i) the cross-firm elasticity of demand the MNE faces for its goods and (ii) the within-firm elasticity of labor substitution across the MNE's plants. In two extensions of the model, we show that this complementarity is enhanced by firm-level (rather than plant-level) fixed costs of exporting and of sourcing inputs

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Year of publication:	January 2024
Authors:	Antràs, Pol ; Fadeev, Evgenii ; Fort, Teresa C. ; Tintelnot, Felix
Institutions:	National Bureau of Economic Research (issuing body)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Multinationales Unternehmen \| Transnational corporation \| Auslandsinvestition \| Foreign investment \| Theorie \| Theory