Gravity for FDI

Joern Kleinert () and Farid Toubal

No 46, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: We derive gravity equations from three different general equilibrium models incorporating multinational firms. We show that gravity equations are particularly adapted to the analysis of foreign affiliates' activities of multinational firms. However, the different theoretical models lead to different specifications and interpretations of the empirical results. This is particularly the case considering gravity equations derived from factor proportion models compared to those derived from proximity concentration theories.

Keywords: Gravity equation; multinational firms; heterogeneity (search for similar items in EconPapers)
JEL-codes: C21 F12 F23 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (6)

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Journal Article: Gravity for FDI (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:46

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