Vertical multinationals and host-country characteristics

Zhang, Kevin Honglin; Markusen, James R.

doi:10.1016/s0304-3878(99)00011-5

Cited by 210 publications

(116 citation statements)

References 7 publications

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“…But, if we are talking about a vertical investment where the large parts of the production are sent abroad as in the countries of our sample, we can find some explanation. According to traditional theory, several studies including those of (Helpman, 1984;1985;Zhang and Markusen, 1999) show that the differences between the sending countries and the receiving ones of FDI in terms of market size, factor endowments of production technologies and consumer's income encourage the vertical FDI flows. Also, the GDP level reflects the qualities of the local markets.…”

Section: Results Of Regressionmentioning

confidence: 99%

The Place of Transport Infrastructures among the Economic Factors of Foreign Direct Investment Attractiveness in the Meda-10 Region

Saidi¹,

Hammami²

2016

American Journal of Economics and Business Administration

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This article aims to evaluate the contribution of transport infrastructures to improve the attractiveness of the Foreign Direct Investment (FDI) in the countries of the MEDA-10 region. The present article is formed by two sections. In the first one, we have a theoretical study of the FDI attractiveness and an explanation of the transport role among the territorial attractiveness factors. In the second section, we represent the empirical study. The obtained results, by using an econometric model with panel data, showed that the traditional determinants of FDI (GDP, economic openness level, inflation, exchange rate ...) have the most significant influence on the international investors' decision. Also, transportation has a significant influence and it is considered as a new important factor of FDI attractiveness with strategic issues that cannot be avoided.

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Section: Results Of Regressionmentioning

confidence: 99%

The Place of Transport Infrastructures among the Economic Factors of Foreign Direct Investment Attractiveness in the Meda-10 Region

Saidi¹,

Hammami²

2016

American Journal of Economics and Business Administration

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“…Horizontal multinational firms set up factories in many countries in order to produce the same goods or services, while vertical multinational firms separate the production process into parts geographically as a final production activity and a center for the production (Zhang and Markusen, 1999). In other words, horizontally integrated multinational firms produce the same product in more than one country, and vertically integrated multinational firms produce different parts of production process in different countries (Kutan and Vukšić, 2007).…”

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

“…In other words, horizontally integrated multinational firms produce the same product in more than one country, and vertically integrated multinational firms produce different parts of production process in different countries (Kutan and Vukšić, 2007). Horizontal multinationals are modeled by Markusen (1983) and vertical multinationals are modeled by Helpman (1984); Zhang and Markusen (1999). Helpman (1984) asserted that in the development of the general equilibrium theories of international trade multinational firms were not emphasized, while studies dealing with multinational firms remained within the framework of partial equilibrium analysis.…”

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

“…Vertical FDI, on the other hand, emphasizes the differences in relative factor costs, and decomposes the production stages among different countries (Braconier in factor costs, every stage of production is located where production factor is cheaper (Johnson, 2006). The skilledlabor-intensive stages of production are located in the country with abundant skilled-labor, and the unskilled-labor intensive or resource-intensive stages in appropriate placements that would facilitate taking advantage of differences in relative factor prices (Zhang and Markusen, 1999). Often taking advantage of the relative wealth, vertical FDI attempts to minimize production costs by using cheap labor force.…”

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

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Causal Relationship between Foreign Direct Investment and Export: The Case of Developing Economies of Asia

Arslan

Çeliköz

Güzel

2018

Asian Economic and Financial Review

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Article HistoryReceived: 14 March 2018 Revised: 9 April 2018 Accepted: 11 April 2018 Published: 13 April 2018 KeywordsForeign direct investment Export Long-run causality Cross-section dependence Slope heterogeneity. JEL Classification:F10, F21, F23.Utilizing annual data from 1980-2015 for 19 developing economies of Asia, this study examines the causality relation between foreign direct investment and exports. According to the first part of Granger Causality results, China, Republic of Korea, Indonesia, Singapore and Turkey has causality from export to FDI at 1% significance level. Nepal, Sri Lanka, Philippines, Thailand and Oman has a causality from export to FDI at 5% significance level. Finally, it is possible to say that Bangladesh and India has a causality from export to FDI at 10% significance level, while the likelihood value is very close to the 5% significance value. According to the second part of the Granger causality relationship tests Sri Lanka, Indonesia and Turkey has a causality from FDI to export at 1% significance level, India, Nepal and Thailand has a causality from FDI to export at 5% significance level. Finally, the existence of a causality relationship from FDI to Export was found at 10% significance level in Hong Kong, Bangladesh, Singapore, Bahrain, Oman and Saudi Arabia. Briefly export led growth hypothesis is valid for developing economies of Asian countries. Contribution/ Originality: This study uses new estimation methodology to analyze causal relationshipbetween foreign direct investments and export which considering cross-section dependence and slope heterogeneity in addition to current literature.

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“…Bilateral trade volume data were originally expressed in the current US dollars and to assure their intertemporal comparability had to be converted to constant 2000 prices using the US GDP deflator. Data on the US GDP deflator were obtained from the ''World Development Indicators'' (WDI) CD-ROM (2006) published by the World Bank in Washington.…”

Section: Datamentioning

confidence: 99%