The Location of the United States' FDI Under the Share Gravity Model
AbstractThis paper examines the geographical distribution of US MNEs FDI using the share gravity model, which adds a competition factor to the classical gravity formulation. The aim is to show that, unlike previous applications of the gravity model to FDI, the share of FDI pertaining to a location is determined not only by its own characteristics but also by those of competing locations. A dynamic share gravity model is estimated for a panel of both industrialised and developing countries using five alternative measures of FDI. The results vindicate the superiority of the share relative to the classical version of the gravity model in that the competition factor has a significantly negative impact on the FDI share.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Economic Journal.
Volume (Year): 21 (2007)
Issue (Month): 4 ()
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Other versions of this item:
- de Mello Sampayo, F., 2000. "The Location of the United States' FDI under the Share Gravity Model," Discussion Papers 00-04, Department of Economics, University of Birmingham.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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