Advanced Search
MyIDEAS: Login to save this paper or follow this series

Foreign Direct Investment in Producer Services: Theory and Empirical Evidence

Contents:

Author Info

  • Horst Raff
  • Marc von der Ruhr

Abstract

This paper examines the pattern of foreign direct investment (FDI) in producer services. We develop a model of FDI in these services and test its predictions using panel data on U.S.FDI in 25 host countries from 1976 to 1995. We find evidence that, in addition to governmental and cultural barriers, producer-service firms may face informational barriers to entry into foreign markets. The presence of such barriers provides a possible explanation for the observation that producer-service FDI tends to follow FDI by downstream industries.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2001/wp-cesifo-2001-10/cesifo_wp598.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 598.

as in new window
Length:
Date of creation: 2001
Date of revision:
Handle: RePEc:ces:ceswps:_598

Contact details of provider:
Postal: Poschingerstrasse 5, 81679 Munich
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Email:
Web page: http://www.cesifo.de
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Fukao, Kyoji & Ito, Keiko, 2000. "Foreign Direct Investment and Service Trade: The Case of Japan," Discussion Paper Series, Institute of Economic Research, Hitotsubashi University a394, Institute of Economic Research, Hitotsubashi University.
  2. Raff, Horst & Kim, Young-Han, 1999. "Optimal export policy in the presence of informational barriers to entry and imperfect competition," Journal of International Economics, Elsevier, Elsevier, vol. 49(1), pages 99-123, October.
  3. Kyle Bagwell, 1986. "Informational Product Differentiation as a Barrier to Entry," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 711, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Bagwell, Kyle, 1991. "Optimal Export Policy for a New-Product Monopoly," American Economic Review, American Economic Association, American Economic Association, vol. 81(5), pages 1156-69, December.
  5. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(2), pages 169-189, Spring.
  6. Ethier, Wilfred J, 1986. "The Multinational Firm," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 101(4), pages 805-33, November.
  7. Schmalensee, Richard, 1982. "Product Differentiation Advantages of Pioneering Brands," American Economic Review, American Economic Association, American Economic Association, vol. 72(3), pages 349-65, June.
  8. Savin, N Eugene & White, Kenneth J, 1978. "Testing for Autocorrelation with Missing Observations," Econometrica, Econometric Society, Econometric Society, vol. 46(1), pages 59-67, January.
  9. Markusen, James R, 1989. "Trade in Producer Services and in Other Specialized Intermediate Inputs," American Economic Review, American Economic Association, American Economic Association, vol. 79(1), pages 85-95, March.
  10. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, Elsevier, vol. 38(3-4), pages 223-247, May.
  11. Vern Terpstra & Chwo-Ming Yu, 1988. "Determinants of Foreign Investment of U.S. Advertising Agencies," Journal of International Business Studies, Palgrave Macmillan, vol. 19(1), pages 33-46, March.
  12. Joseph F. Francois, 1990. "Trade in Producer Services and Returns Due to Specialization under Monopolistic Competition," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 23(1), pages 109-24, February.
  13. Joseph Farrell, 1986. "Moral Hazard as an Entry Barrier," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 440-449, Autumn.
  14. Horstmann, Ignatius J & Markusen, James R, 1987. "Strategic Investments and the Development of Multinationals," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 109-21, February.
  15. James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
  16. Francois, Joseph F, 1990. "Producer Services, Scale, and the Division of Labor," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 715-29, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Markus Kelle & Jörn Kleinert & Horst Raff & Farid Toubal, 2012. "Cross-Border and Foreign-Affiliate Sales of Services: Evidence From German Micro-Data," Kiel Working Papers 1771, Kiel Institute for the World Economy.
  2. Ngo Van Long & Ray Riezman & Antoine Soubeyran, 2001. "Fragmentation, Outsourcing and the Service Sector," CIRANO Working Papers, CIRANO 2001s-43, CIRANO.
  3. repec:mrq:igeawp:0501 is not listed on IDEAS
  4. John P. Weche Geluebcke, 2011. "Foreign Ownership and Firm Performance in German Services: First Evidence based on Official Statistics," Working Paper Series in Economics, University of Lüneburg, Institute of Economics 213, University of Lüneburg, Institute of Economics.
  5. Jota Ishikawa & Hodaka Morita & Hiroshi Mukunoki, 2010. "FDI in Post-Production Services and Product Market Competition," Global COE Hi-Stat Discussion Paper Series, Institute of Economic Research, Hitotsubashi University gd10-136, Institute of Economic Research, Hitotsubashi University.
  6. Van Long, Ngo & Riezman, Raymond & Soubeyran, Antoine, 2005. "Fragmentation and services," The North American Journal of Economics and Finance, Elsevier, Elsevier, vol. 16(1), pages 137-152, March.
  7. Joseph Daniels & Walid Hejazi & Marc von der Ruhr, 2005. "Regional vs. Global Financing Strategies for U.S. MNEs," Working Papers and Research, Marquette University, Center for Global and Economic Studies and Department of Economics 0511, Marquette University, Center for Global and Economic Studies and Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_598. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.