The relationship between domestic and outward foreign direct investment: The role of industry-specific effects
(2005) In International Business Review 14(6). p.677-694- Abstract
- Previous research has been inconclusive as regards the effect of outward foreign direct investment (FDI) on domestic investments. In this article, we show that this inconclusiveness can be explained at a disaggregated level as a function of the way industries are organized. Based on a simple theoretical framework including monitoring and trade costs, we argue that a complementary relationship can be expected to prevail in vertically integrated industries, whereas a substitutionary relationship can be expected in horizontally organized production. The empirical analysis confirms a significant difference between the two categories of industry as regards the impact of outward FDI on domestic investment. The results may thus have profound... (More)
- Previous research has been inconclusive as regards the effect of outward foreign direct investment (FDI) on domestic investments. In this article, we show that this inconclusiveness can be explained at a disaggregated level as a function of the way industries are organized. Based on a simple theoretical framework including monitoring and trade costs, we argue that a complementary relationship can be expected to prevail in vertically integrated industries, whereas a substitutionary relationship can be expected in horizontally organized production. The empirical analysis confirms a significant difference between the two categories of industry as regards the impact of outward FDI on domestic investment. The results may thus have profound policy implications. JEL no. F12, F21, F23, G34. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/893987
- author
- Braunerhjelm, P ; Oxelheim, Lars LU and Thulin, P
- organization
- publishing date
- 2005
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- industry-specific effects, FDI, gross domestic investment
- in
- International Business Review
- volume
- 14
- issue
- 6
- pages
- 677 - 694
- publisher
- Elsevier
- external identifiers
-
- wos:000235834000002
- scopus:29544452526
- ISSN
- 1873-6149
- DOI
- 10.1016/j.ibusrev.2005.09.004
- language
- English
- LU publication?
- yes
- id
- 2fd109cf-0bc4-4bad-a93e-3052d9234f44 (old id 893987)
- date added to LUP
- 2016-04-01 11:54:17
- date last changed
- 2022-03-28 17:22:54
@article{2fd109cf-0bc4-4bad-a93e-3052d9234f44,
abstract = {{Previous research has been inconclusive as regards the effect of outward foreign direct investment (FDI) on domestic investments. In this article, we show that this inconclusiveness can be explained at a disaggregated level as a function of the way industries are organized. Based on a simple theoretical framework including monitoring and trade costs, we argue that a complementary relationship can be expected to prevail in vertically integrated industries, whereas a substitutionary relationship can be expected in horizontally organized production. The empirical analysis confirms a significant difference between the two categories of industry as regards the impact of outward FDI on domestic investment. The results may thus have profound policy implications. JEL no. F12, F21, F23, G34.}},
author = {{Braunerhjelm, P and Oxelheim, Lars and Thulin, P}},
issn = {{1873-6149}},
keywords = {{industry-specific effects; FDI; gross domestic investment}},
language = {{eng}},
number = {{6}},
pages = {{677--694}},
publisher = {{Elsevier}},
series = {{International Business Review}},
title = {{The relationship between domestic and outward foreign direct investment: The role of industry-specific effects}},
url = {{http://dx.doi.org/10.1016/j.ibusrev.2005.09.004}},
doi = {{10.1016/j.ibusrev.2005.09.004}},
volume = {{14}},
year = {{2005}},
}