The firm export and FDI choice in the context of gravity

In this paper, I show that in a theoretical environment where monopolistic competitive firms choose between exporting and servicing through a multinational with foreign direct investment (FDI), a gravity representation of exports and FDI can be derived. I then discuss the extent to which the resulting gravity equations are comparable and suggest a gravity-type regression that allows for direct interpretation of the differential effects of variables on exports and FDI.

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Year of publication:	2013
Authors:	Schmeiser, Katherine N.
Published in:	International Review of Economics & Finance. - Elsevier, ISSN 1059-0560. - Vol. 27.2013, C, p. 592-596
Publisher:	Elsevier
Subject:	Trade \| Gravity \| FDI \| Monopolistic competition

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Type of publication:	Article
Classification:	F12 - Models of Trade with Imperfect Competition and Scale Economies ; F23 - Multinational Firms; International Business
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010664337