The firm export and FDI choice in the context of gravity

Katherine Schmeiser ()

International Review of Economics & Finance, 2013, vol. 27, issue C, 592-596

Abstract: In this paper, I show that in a theoretical environment where monopolistic competitive firms choose between exporting and servicing through a multinational with foreign direct investment (FDI), a gravity representation of exports and FDI can be derived. I then discuss the extent to which the resulting gravity equations are comparable and suggest a gravity-type regression that allows for direct interpretation of the differential effects of variables on exports and FDI.

Keywords: Trade; Gravity; FDI; Monopolistic competition (search for similar items in EconPapers)
JEL-codes: F12 F23 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:27:y:2013:i:c:p:592-596

DOI: 10.1016/j.iref.2013.02.002

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