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Foreign direct investment with endogenous technology choice

Herbert Dawid () and Benteng Zou
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Herbert Dawid: Department of Business Administration and Economics and Institute of Mathematical Economics, Bielefeld University, Germany

No 6, Gecomplexity Discussion Paper Series from Action IS1104 "The EU in the new complex geography of economic systems: models, tools and policy evaluation"

Abstract: In this paper, we analyze optimal foreign direct investment of a firm which operates in a duopolistic market. We characterize a technology spillover threshold and show that for an intensity of spillovers below this threshold, there is a unique locally asymptotic stable steady state with a positive capital stock in the developing country. Furthermore, we characterize how optimal foreign investment patterns and the investor’s value function depend on the level of technology transferred and characterize the optimal level to be used for the foreign direct investment.

Keywords: Foreign direct investment; technology spillovers; optimal control (search for similar items in EconPapers)
JEL-codes: C61 D92 F21 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-11, Revised 2014-11
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http://www.gecomplexity-cost.eu/repec/cst/wpaper/geco_dp_6.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: Foreign Direct Investment with Endogenous Technology Choice (2017) Downloads
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