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| Author: | Velde, D. W. te |
| Title: | Foreign Direct Investment and Factor Prices in U.S. Manufacturing |
| Journal: | Weltwirtschaftliches Archiv
2001 : VOL. 137:4, p. 622-643 |
| Index terms: | FOREIGN INVESTMENT DIRECT INVESTMENT MANUFACTURING INDUSTRY PRICES USA |
| Freeterms: | FDI |
| Language: | eng |
| Abstract: | There are generally two approaches to modeling the impact of inward FDI on factor prices. First, there is the labor economists' approach, which is considered by e.g. Blonigen and Slaughter (1999). They look at the effect of inward FDI on skill upgrading within sectors, as factors are assumed to be immobile across sectors. The second approach reflects the trade economists' view of the world (Learner 1996; Feenstra and Hanson 1999). Factors are perfectly mobile between sectors and factor price differences across sectors reflect differences in factor quality. The contribution of this paper is to regard inward FDI as one of the structural variables affecting relative sector profitability in terms of prices and productivity and to assess any resulting sector bias. |
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