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Foreign Direct Investment

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  • Tain-jy Chen
  • Yi-Ping Chen
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    Abstract

    Whether foreign direct investment will lead to deindustrialisation at home depends on the investing country's capability to restructure itself on the intra-firm, intra-industry, and intersectoral levels. This paper divides FDI into defensive and expansionary types and argues that defensive FDI is an indication of deteriorating comparative advantage at home. The industry in which defensive FDI prevails lacks the capacity for restructuring. Data from Taiwan show that domestic production declines in an industry when defensive FDI dominates expansionary FDI in that industry.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/13662719500000004
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    Bibliographic Info

    Article provided by Taylor and Francis Journals in its journal Industry and Innovation.

    Volume (Year): 2 (1995)
    Issue (Month): 1 ()
    Pages: 57-68

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    Handle: RePEc:taf:indinn:v:2:y:1995:i:1:p:57-68

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    Cited by:
    1. Gunseli Berik, 2000. "Mature Export-Led Growth and Gender Wage Inequality in Taiwan," Feminist Economics, Taylor and Francis Journals, vol. 6(3), pages 1-26.
    2. Patrick Hamm & Lawrence King, 2010. "Post-Manichean Economics: Foreign Investment, State Capacity and Economic Development in Transition Economies," Working Papers wp227, Political Economy Research Institute, University of Massachusetts at Amherst.

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