A Linder Hypothesis for Foreign Direct Investment

• 成果类型: Article
• 署名作者: Fajgelbaum, Pablo; Grossman, Gene M.; Helpman, Elhanan
• 署名单位: University of California System; University of California Los Angeles; Princeton University; Harvard University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdu027
• 发表日期: 2015
• 页码: 83-121
• 关键词: INTERNATIONAL-TRADE; product-quality; multinational production; income-distribution; intraindustry; determinants; economies; MODEL

摘要

We study patterns of foreign direct investment (FDI) in a multi-country world economy. We develop a model featuring non-homothetic preferences for quality and monopolistic competition in which specialization is purely demand-driven and the decision to serve foreign countries via exports or FDI depends on a proximity-concentration trade-off. We characterize the joint patterns of trade and FDI when countries differ in income distribution and size and show that FDI is more likely to occur between countries with similar per capita income levels. The model predicts a Linder Hypothesis for horizontal FDI, which is consistent with some patterns we find using establishment-level data on multinational activity.