search query: @author Forslid, R. / total: 6
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| Author: | Ekholm, K. Forslid, R. Markusen, J.R. |
| Title: | Export-platform foreign direct investment |
| Journal: | Journal of the European Economic Association
2007 : JUN, VOL. 5:4, p. 776-795 |
| Index terms: | foreign investment direct investment production exports models multinational companies North America Europe |
| Freeterms: | FDI |
| Language: | eng |
| Abstract: | A not too well understood empirical phenomenon is export-platform affiliate production (EP), especially for sale in third countries rather than in the parent or host countries. This study develops a 3-region model, with two identical large, high-cost countries (called as 'North') and a small, low-cost country (as 'South'). The large countries each have one firm. The study's theory section analyzes the conditions under which one or both of these firms uses the 'South' to produce for a. export back to the parent (home-country EP), b. export to the other large country (third-country EP), or c. export to both (global EP). A free-trade area btw. one of the northern countries and 'South' can lead to the insider northern firm choosing home or global EP and the outsider firm choosing third-country EP for a range of parameter values. The empirical section shows the relevance of this outcome. Foreign manufacturing affiliates of U.S. multinationals inside North America concentrate on home-country EP while affiliates inside Europe concentrate on third-country EP. |
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