Temporal Clusters in Foreign Direct Investment
AbstractForeign Direct Investment (FDI) occurs in temporal clusters. In contrast to the existing literature, which explains these clusters as being a result of oligopolistic reaction, this paper presents a two-by-two-by-two general equilibrium model of companies which engage in monopolistic competition. These companies can serve a foreign market through exports or by producing abroad. With falling transport and communication costs, the internationalisation of production becomes profitable and, thus, multinational enterprises (MNE) emerge. In this process, FDI of companies from one country occurs in clusters, because an FDI of one company increases the profitability of FDI of any other national competitor.
Download InfoIf 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.
Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 930.
Length: 50 pages
Date of creation: Jun 1999
Date of revision:
Find related papers by JEL classification:
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Jörn Kleinert, 2000.
"Growing Trade in Intermediate Goods: Outsourcing, Global Sourcing or Increasing Importance of MNE Networks?,"
Kiel Working Papers, Kiel Institute for the World Economy
1006, Kiel Institute for the World Economy.
- Jörn Kleinert, 2003. "Growing Trade in Intermediate Goods: Outsourcing, Global Sourcing, or Increasing Importance of MNE Networks?," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 11(3), pages 464-482, 08.
- Jö Kleinert, 2001. "The Time Pattern of the Internationalization of Production," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 2(1), pages 79-98, 02.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny).
If references are entirely missing, you can add them using this form.