Multiproduct Multinationals and Reciprocal FDI Dumping

Richard Baldwin and Gianmarco Ottaviano

No 6483, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: F12 F23 (search for similar items in EconPapers)
Date: 1998-03
Note: ITI
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Published as Baldwin, Richard and Gianmarco I. P. Ottaviano. "Multiproduct Multinationals And Reciprocal," Journal of International Economics, 2001, v54(2,Aug), 429-448.

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Journal Article: Multiproduct multinationals and reciprocal FDI dumping (2001)
Working Paper: Multiproduct Multinationals and Reciprocal FDI Dumping (1998)
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