Gains from FDI Inflows with Incomplete Information

Assaf Razin and Efraim Sadka

No 9008, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper develops an international macroeconomic model of FDI flows with a unique feature: a hands-on management ability to react in real time to changing economic environments. Anticipating this advantage, foreign direct investors can outbid other investors in a certain industry in which they specialize in the source country. The model can explain both two-way FDI flows among developed countries and one-way FDI flows from developed to developing country. The unique gains from FDI to the host country stem from the increased eciency of domestic investment.

JEL-codes: F2 F3 (search for similar items in EconPapers)
Date: 2002-06
New Economics Papers: this item is included in nep-ifn
Note: IFM
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Citations: View citations in EconPapers (9)

Published as Razin, Assaf & Sadka, Efraim, 2003. "Gains from FDI inflows with incomplete information," Economics Letters, Elsevier, vol. 78(1), pages 71-77, January.

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Journal Article: Gains from FDI inflows with incomplete information (2003)
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