The Proximity-Concentration Tradeoff under Uncertainty

• 成果类型: Article
• 署名作者: Ramondo, Natalia; Rappoport, Veronica; Ruhl, Kim J.
• 署名单位: University of California System; University of California San Diego; University of London; London School Economics & Political Science; New York University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdt018
• 发表日期: 2013
• 页码: 1582-1621
• 关键词: FOREIGN DIRECT-INVESTMENT; business-cycle; INTERNATIONAL-TRADE; exchange-rate; MODEL; selection; gains; FDI; multinationals; endogeneity

摘要

In this article, we analyse the firm's choice between serving a foreign market through exports or through foreign affiliate sales in an environment characterized by country-specific shocks to the cost of production. Our model predicts that country pairs with less-correlated output fluctuations trade more, relative to affiliate sales, whereas countries with more-volatile fluctuations are served relatively more by exporters than by foreign affiliates selling abroad. Using detailed data on trade and affiliate sales, we find empirical support for our model's predictions.