Production versus distribution-oriented FDI

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...

Service-Oriented Architecture on the Grid for FDI Integration

Many model-based fault diagnosis approaches have been proposed so far and some of them are applied in industrial practice. But for modern complex processes, due to the variable nature of faults and model uncertainty, no single approach can diagnose all faults and meet different contradictory criteria. In this paper, the importance of integration of different fault diagnosis schemes in a common ...

Sequential versus integrated optimization: Production, location, inventory control, and distribution

Exchange rates and FDI : Goods versus capital market frictions

Economic theory provides two main explanations why changes in exchange rates can affect foreign direct investment (FDI). According to a first explanation, FDI reacts to exchange rate changes if there are information frictions on capital markets and if the investment by firms depends on their net worth (capital market friction hypothesis). According to a second explanation, FDI reacts to exchang...