Aizenman, Joshua; Marion, Nancy P. - National Bureau of Economic Research (NBER) - 2001
(FDI). Vertical FDI takes place when the multinational fragments the production process internationally, locating each … stage of production in the country where it can be done at the least cost. Horizontal FDI occurs when the multinational … greater uncertainty reduces the expected income from vertical FDI but increases the expected income from horizontal FDI. In …