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How Far Away is an Intangible? Services FDI and Distance

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  • Ronald B. Davies
  • Amélie Guillin

Abstract

Foreign direct investment (FDI) in services has grown significantly in recent years. Evidence of spatial relationships in FDI decisions have been provided for goods manufacturing by utilizing physical distance-based measures of trade costs. This paper investigates spatial interactions for services FDI using several distance measures, including physical distance, genetic distance, and transport time. Across different measures of distance, the traditional determinants of outbound FDI activity remain valid for services. We also find spatial interdependence for services FDI that is generally supportive of complex vertical motivations.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3599.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3599

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Keywords: foreign direct investment; services; spatial econometric techniques;

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Cited by:
  1. Turan Subasat & Sotirios Bellos, 2013. "Governance and foreign direct investment in Latin America: A panel gravity model approach," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 50(1), pages 107-131, May.
  2. Amélie Guillin, 2011. "Comparison between FDI motivations in goods and services," Economics Bulletin, AccessEcon, vol. 31(4), pages 2744-2756.

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