Trade and FDI revisited: the role of location

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Chapter 5 in The Development of International Business, 2017, pp 46-56 from Edward Elgar Publishing

Abstract: In terms of the broad theoretical prospectus (OLI) this chapter elaborates on location advantage, but does this through an exposition of the ideas of Kojima. The chapter presents the case of ‘trade-creating FDI’ (ES operations in NH-from Chapter 4) as reflecting the ability of MNEs (in a freer-trade context) to activate a country’s sources of ‘static comparative advantage’ as positive LAs, thereby generating enhanced efficiency and welfare and providing host economies with a strong impetus to growth and development. This is contrasted with the case of ‘trade-destroying FDI’ where a constrained international environment (trade barriers operating as negative LAs) generates the inefficiencies of MS operations in the MH.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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