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The Relationship Between Domestic and Outward Foreign Direct Investment : The Role of Industry-Specific Effects

Braunerhjelm, Pontus (author)
KTH,Transporter och samhällsekonomi,Royal Institute of Technology, Stockholm, Sweden
Oxelheim, Lars (author)
Lund University,Lunds universitet,Företagsekonomiska institutionen,Ekonomihögskolan,Institutet för Ekonomisk forskning,Department of Business Administration,Lund University School of Economics and Management, LUSEM,Institute of Economic Research,Lund University School of Economics and Management, LUSEM
Thulin, Per, 1963- (author)
Linköpings universitet,KTH,Transporter och samhällsekonomi,Institutionen för ekonomisk och industriell utveckling,Tekniska högskolan
 (creator_code:org_t)
Amsterdam : Elsevier, 2005
2005
English.
In: International Business Review. - Amsterdam : Elsevier. - 0969-5931 .- 1873-6149. ; 14:6, s. 677-694
  • Journal article (peer-reviewed)
Abstract Subject headings
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  • 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.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv (hsv//swe)
SOCIAL SCIENCES  -- Economics and Business (hsv//eng)
SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)
SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Keyword

FDI
gross domestic investment
industry-specific effects
Business and economics
Ekonomi
TECHNOLOGY
industry-specific effects
FDI
gross domestic investment

Publication and Content Type

ref (subject category)
art (subject category)

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