Time Zones and FDI with Heterogenous Firms

Sugata Marjit and Toru Kikuchi

No 425, Discussion Papers Series from University of Queensland, School of Economics

Abstract: Based on Helpman et al. (2004), we propose a simple two-country (Home and Foreign) model with heterogeneous firms that capture the role of FDI via utilizing time zone differences. Two countries are located in different time zones and there is no overlap in daily working hours. It will be shown that productivities of the firms undertaking FDI are higher than the productivities of non-FDI firms. Although the results look quite similar with Helpman et al. (2004), the direction of service trade flow is totally different: Foreign subsidiaries of high- productivity firms provide services for the Home market.

Date: 2011
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Related works:
Working Paper: Time Zones and FDI with Heterogeneous Firms (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:425

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