Logistic infrastructure and the international location of fragmented production

Synchronized Factories

“…15 In particular, Appendix B "Specifi cation for the Model of Vertical FDI and Logistics Infrastructure" shows that the main fi nding holds under least squares and negative binomial estimations, as well as after the inclusion of parent, subsidiary, and sector-fi xed effects, and under the more stringent parent-subsidiary, sector-fi xed effects. In a longer version of this analysis we also show that the results are suffi ciently robust to explicitly include additional covariates in the model; see Blyde and Molina ( 2013 ).…”

“…The formulation follows other formulations in its use of individual country fixed effects to estimate trade equations (Eaton & Kortum, 2001Feenstra, 2004) and FDI equations (Head & Ries, 2008). For detailed sources of all the datasets, see Blyde and Molina (2013). Column 1 of Table B.1 presents the results with a least square estimation and column 2 presents the results with a quasi-maximum likelihood estimator (QMLE); in particular, the negative binomial model that has the advantage of incorporating the zero value observations that are dropped in the least squares because of the linear-in-logs specification.…”

Do international flights promote FDI? The role of face‐to‐face communication

“…Additionally, I show the robustness of the positive flight effects to an endogeneity bias by using world heritage sites as an instrument for flight frequencies. The results remain similar after accounting for alternative sector‐level interactions with flights, including a share of technicians or managers, task routineness index (Costinot et al, ), importance of relationship‐specific investments (Nunn, ), and time sensitiveness (Blyde & Molina, ). Taken together, the results support the hypothesis that more frequent passenger flights can lower the FFC costs for FDI decisions.…”

“…While these alternative sector‐level interactions may not be directly associated with air transportation, Blyde and Molina () show that the logistic infrastructure encourages vertical FDI more strongly in industries that are more dependent on logistic services. Since such interaction effects may introduce a bias in the interaction, , I include an additional interaction term between passenger flights and time sensitiveness index.…”

Infrastructure and Export Performance in the Pacific Alliance

“…This objective can only be accomplished if public policies are oriented towards designing transportation networks that are able to supply reliable transportation services at the most competitive prices. Recent evidence from Blyde (2014) and Blyde and Molina (2015) shows that LAC's low participation in global production networks is partly rooted in the region's substandard transportation infrastructure. Authors' estimates reveal that a 10% improvement in the quality of a country's transportation infrastructure would imply a 3.9% increase in that country's number of global value chains.…”