Host market characteristics, FDI, and the FDI – trade relationship

Tadesse, Bedassa; Ryan, Michael J.

doi:10.1080/0963819042000218683

Cited by 20 publications

(12 citation statements)

References 33 publications

(33 reference statements)

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“…That is for example, with respect to positive trade-FDI linkages much more empirical support is found in the context of developing rather than developed countries 6 (see e.g. Tadesse & Ryan, 2004). Another sensitive aspect in the modelling set-up is the sample period: As Pain & Wakelin (1998) point out, the nature of the trade-FDI linkage may change over time e.g.…”

Section: Literature Review: Theory and Empiricsmentioning

confidence: 99%

Trade-FDI Linkages in a System of Gravity Equations for German Regional Data

2009

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Trade-FDI Linkages in a System of Gravity Equations for German Regional DataAbstract We analyse the nature of German trade-FDI linkages within the EU27 based on a simultaneous equation gravity approach for imports, exports, in-and outward FDI stocks. We adopt both a Hausman-Taylor (1981) IV approach (3SLS-GMM) and rival non-IV estimation (the system extension to the Fixed Effects Vector Decomposition model recently proposed by Plümper & Tröger, 2007). Turning to the results, both estimators give empirical support for our chosen gravity setup as an appropriate framework in explaining German trade and FDI activity. Looking carefully at cross-variable linkages we basically find substitutive links between trade flows and outward FDI in line with earlier empirical evidence for Germany. Building upon German state level data we are also able to analyse the sensitivity of the results for regional sub-samples. The latter disaggregation hints at structural differences among the trade and FDI activity of the two West and East German macro regions on the one hand, and also their interaction with the 'core' EU15 member states opposed to the overall EU27 aggregate on the other hand. Taking West German-EU27 trade & FDI as an example, the identified pairwise linkages closely follow the theoretical predictions of New Trade Theory models as in Baldwin & Ottaviano (2001): That is, when trade is merely of intra-industry type with non-zero trade costs, we observe export replacement effects of FDI. However, at the same time outward FDI stimulates trade via reverse good imports. For the West German-EU15 sub-sample we even reveal complementaries among export and outward FDI activity. This strongly advocates to care for the regional dimension in analysing cross-variable linkages of trade and FDI.JEL Classification: C33, F14, F21

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Section: Literature Review: Theory and Empiricsmentioning

confidence: 99%

Trade-FDI Linkages in a System of Gravity Equations for German Regional Data

2009

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“…Hurdle models (Mullahy 1986) take a somewhat different approach and combine a left-truncated count component with a rightcensored hurdle component. Examples of applications of Zero-inflated Poisson (ZIP) and Zero-inflated Negative Binomial (ZINB) models to FDI location analyses are in Tadesse and Ryan (2004), Basile (2004) and Tomlin (2000).…”

Section: Count Data Modelsmentioning

confidence: 99%

Complexity and Geographical Economics

Commendatore¹,

Kayam²,

Kubin³

2015

Dynamic Modeling and Econometrics in Economics and Finance

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“…In contrast, hurdle models (Mullahy ) combine a left‐truncated count component with a right‐censored hurdle component. Applications of these models to inward FDI location analyses are in Tomlin (), Iannizzotto and Miller (), Tadesse and Ryan (), and Basile ().…”

mentioning

confidence: 99%

Geoadditive Models for Regional Count Data: An Application to Industrial Location

Basile

Benfratello

Castellani

2012

Geographical Analysis

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Host market characteristics, FDI, and the FDI – trade relationship

Cited by 20 publications

References 33 publications

Trade-FDI Linkages in a System of Gravity Equations for German Regional Data

Trade-FDI Linkages in a System of Gravity Equations for German Regional Data

Complexity and Geographical Economics

Geoadditive Models for Regional Count Data: An Application to Industrial Location

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