Trade-FDI Linkages in a Simultaneous Equations System of Gravity Models for German Regional Data

Timo Mitze, Björn Alecke and Gerhard Untiedt

International Economics, 2010, issue 122, 121–162

Abstract: Using regional data, we analyze the nature of German trade-FDI linkages within the EU27 for a system of gravity equations. Starting from a macroeconomic perspective, our analysis supports earlier empirical evidence for Germany in finding substitutive links between trade and outward FDI. However, switching to a (macro-)regional perspective, we reveal additional complementary correlations, which can be motivated by recent theoretical approaches. We also find regional heterogeneity, which emphasizes the need to take into account the regional dimension in analyzing cross-variable linkages between trade and FDI.

Keywords: Trade; FDI; panel data; simultaneous equations (search for similar items in EconPapers)
JEL-codes: C33 F14 F21 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (19)

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Chapter: Trade-FDI Linkages in a Simultaneous Equations System of Gravity Models for German Regional Data (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiie:2010-q2-122-5

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