Time Zones and FDI with Heterogeneous Firms
نویسندگان
چکیده
Based on Helpman et al. (2004) we propose a simple two-country (Home and Foreign) model with heterogeneous firms to capture the role of FDI via utilizing time zone differences. Two countries are located in different time zones and there is no overlap in daily working hours. It will be shown that productivities of the firms undertaking FDI are higher than the productivities of non-FDI f i r m s . Although the results look quite similar with Helpman et al. (2004), the direction of service trade flow is totally different: Foreign subsidiaries of highproductivity firms serve the Home market. JEL classification: F12
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