FDI versus Exports in a General Equilibrium Ricardian Model*

Exports versus FDI revisited: Does finance matter?

The crisis on international financial markets that started in 2007 has shown the potential links between the financial sector and the real economy. Exports and foreign direct investment (FDI) have declined, presumably not only because of a lack of demand, but also because of restricted access of firms to external finance. In this paper, we explore the impact of access to external finance on fir...

Exports versus FDI: do firms use FDI as a mechanism to smooth demand volatility?

In this paper, we first develop a simple two-period model of oligopoly to show that, under demand uncertainty, whether a firm chooses to serve foreign markets by exports or via foreign direct investment (FDI) may depend on demand volatility along with other well-known determinants such as size of market demand and trade costs. Although fast transport such as air shipment is an option for export...

Exports versus FDI in German manufacturing: firm performance and participation in international markets

This paper tests some of the predictions of recent advances in trade theory that have focused on different trade patterns of firms within the same sector. Helpman, Melitz and Yeaple (2005) develop a model in which innate productivity differences between firms determine the degree of international engagement of firms: The least productive firms produce for the domestic market, better performers ...

Impact of FDI on Domestic Firms’ Exports in China

Globalisation , Productivity and Technology Research Paper 2003 / 21 Exports versus FDI : An Empirical Test

In a recent paper Helpman, Melitz and Yeaple (2002) argue firm heterogeneity leads to self-selection in the structure of international commerce. Only the most productive firms find it profitable to meet the higher costs associated with FDI; the next set of firms find it profitable to serve foreign markets through exporting; while the least productive firms find it profitable to serve only domes...