Outward FDI Effects on the Portuguese Trade Balance, 1996-2007

Miguel Fonseca (), António Mendonça () and José Passos ()
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José Passos: Instituto Superior de Economia e Gestão / Universidade Técnica de Lisboa

No 20, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: Given the increased internationalisation of the Portuguese economy through outward Foreign Direct Investment (FDI), particularly on the Portuguese-speaking countries, our main objective is to discuss the empirical relationship between this outward FDI and trade. We use panel data analysis within a framework of gravity equations for exports and imports, with a sample composed by EU-15, U.S.A., Brazil, Angola, Japan and China, for the period 1996-2007. Our main conclusion is that the empirical evidence for Portugal is consistent with a substitution hypothesis between direct investment abroad and trade, and consequently we detect a negative trade balance effect with the majority of countries in our sample, excepting Angola and, in a lesser extension, Spain.

Keywords: Foreign Direct Investment; Trade; Gravity Model; Portugal. (search for similar items in EconPapers)
JEL-codes: C23 F14 F21 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2009-09, Revised 2009-09
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https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_20.pdf First version, 2009 (application/pdf)

Related works:
Working Paper: Outward FDI Effects on the Portuguese Trade Balance 1996-2007 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0020

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