FDI and trade: complements and substitutes

José Pontes

No 2006/03, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This paper presents a non-monotonic relationship between foreign direct investment and trade based on the idea that, although FDI eliminates trade costs on the final good, the investing firm has to bear increased trade costs on an intermediate good.

Keywords: Foreign Direct Investment; Trade; Firm Location. (search for similar items in EconPapers)
JEL-codes: F23 L12 R30 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-ifn and nep-int
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ise:isegwp:wp32006

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More papers in Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa Department of Economics, ISEG - Lisbon School of Economics and Management, Universidade de Lisboa, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL.
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