This paper empirically examines the extent to which the FDI – trade relationship is affected by host-country heterogeneities associated with the development (income) and market servicing roles of Japanese FDI host countries. Using the counts and values of Japanese aggregate FDI and trade flows into more than 100 geographically and developmentally diverse countries, it is shown that Japanese FDI...

In this paper we re-examine the regional determinants of FDI in China using both total FDI flows, and FDI flows disaggregated by entry mode. Building on both the FDI location and entry mode choice literatures, we argue for the existence of mode-specific location advantages, and test for their existence. We first specify and estimate a location model of aggregate FDI flows to Chinese regions. Us...

In a global context foreign direct investment (FDI) and migration substitute one another in the matching process between workers and firms. However, as labor flows can lead to the formation of business networks, migration can actually facilitate FDI in the long-run. We first present a stylized model for a small open economy illustrating these offsetting effects. We then use U.S. data on bilater...

Foreign direct investment has contributed significantly to Chinese economic development. Yet the geographic distribution of FDI is quite uneven. Compared with the inward FDI in the eastern and mid regions of China, the Western region has attracted less FDI. FDI is fuelling much of the rapid economic leap of the developed regions of China and the significant inequity grows further. There are man...

FDI not only affects the host country's economic growth, but also affects the environment. Under the background of reality that in pursuit of green development, we need to take the comprehensive consideration of FDI performance from economic growth and environmental pollution. Considering the economic and environmental factors, we estimated 280 cities' green development efficiency in China from...

This paper examines how an industry’s productivity is changed by inward FDI occurring in affiliated downstream industries those buying from the focal industry. While controlling for FDI into the focal industry, I find that FDI in downstream industries has a significant negative influence on U.S. manufacturing industries in 1987-1991. Downstream FDI reduces productivity by lowering the demand fo...

Based on a comprehensive review of previous studies about the threshold effects of financial development on the process of foreign direct investment (FDI) spillovers, the present work roundly measures the financial development from the aspects of scale, structure, and efficiency and applies a multiple threshold regression model to estimate the threshold effects of financial development on FDI s...

This paper analyses the role of exchange rates in the competition for FDI. Based on the assumption that two countries compete for FDI from the same source country, the paper shows explicitly that the relative FDI of one country is determined by the relative real exchange rate between its currency and that of the source country. The theoretical result suggests that, if the currency of one FDI re...

This paper reviews the theoretical literature explaining financial FDI, as well as the empirical results on the determinants of financial FDI and its potential effects for the home country. From this revision, we conclude that, at the present stage, the existing theoretical paradigms need to be adapted to explain the recent surge in international banks’ local operations in emerging countries fi...