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The Impact of the Process of Economic Integration on the Relationships between Foreign Direct Investment (FDI) and Trade: Cases of Japan and U.S. in European Union

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  • Zu Kweon Kim

Abstract

In the traditional trade model, FDI and trade were substituting each other because the major objectives of the traditional model were finished goods. However, the introduction of intra-firm trade goods by multinational enterprises (MNEs), and the process of the international economic integration expanded the trade model to embrace the possibility of complementarities between FDI and trade. Accordingly, this study tries to find out the relationships between FDI and trade in the past decades by comparing the FDI and trade records of Japanese and MNEs of the United States.

Suggested Citation

  • Zu Kweon Kim, 2004. "The Impact of the Process of Economic Integration on the Relationships between Foreign Direct Investment (FDI) and Trade: Cases of Japan and U.S. in European Union," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 7(2), pages 135-148, September.
    • Handle: RePEc:sae:intare:v:7:y:2004:i:2:p:135-148
    DOI: 10.1177/223386590400700207
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    References listed on IDEAS

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    1. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    2. Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, vol. 87(4), pages 520-544, September.
    3. Lipsey, Robert E & Weiss, Merle Yahr, 1981. "Foreign Production and Exports in Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 488-494, November.
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    Cited by:

    1. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2019. "Searching The Us Fdi Determinants In The Eu: Is There A Euro Effect?," Working Papers 1916, Department of Applied Economics II, Universidad de Valencia.
    2. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2021. "Is there a euro effect in the drivers of US FDI? New evidence using Bayesian model averaging techniques," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(4), pages 881-926, November.
    3. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2022. "Which are the long-run determinants of US outward FDI? Evidence using large long-memory panels," Working Papers 2210, Department of Applied Economics II, Universidad de Valencia.
    4. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2022. "A fresh assessment of the euro effect on outward US FDI," Working Papers 2209, Department of Applied Economics II, Universidad de Valencia.

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