International Trade and Factor Mobility: An Empirical Investigation
AbstractForeign Direct Investment (FDI) has been growing rapidly, at a pace far exceeding the growth in international trade. Thus, a full understanding of the relationship between trade in goods and FDI is important for obtaining a complete picture of the extent and sources of international linkages. We investigate whether FDI serves as a complement to trade or a substitute for trade based on the effects identified by the Rybczynski theorem whereby an increase in a factor of production used intensively in one sector affects production both in that sector and in other sectors. Using detailed data on bilateral capital and trade flows between the United States and individual Latin American countries, we examine the linkages between FDI into particular sectors of Latin American economies and the net exports of those and other manufacturing sectors. We find that FDI from the United States can lead to significant, and varied, shifts in the composition of activity in many Latin American countries and across many manufacturing industries.
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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7196.
Date of creation: Jun 1999
Date of revision:
Note: IFM ITI
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Linda S. Goldberg & Michael W. Klein, 1999. "International trade and factor mobility: an empirical investigation," Staff Reports 81, Federal Reserve Bank of New York.
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F3 - International Economics - - International Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-07-28 (All new papers)
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.:
- Markusen, James R & Svensson, Lars E O, 1985.
"Trade in Goods and Factors with International Differences in Technology,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(1), pages 175-92, February.
- James R. Markusen & Lars E.O. Svensson, 1983. "Trade in Goods and Factors with International Differences in Technology," NBER Working Papers 1101, National Bureau of Economic Research, Inc.
- Michael W. Klein & Eric Rosengren, 1992.
"The Real Exchange Rate and Foreign Direct Investment in the United States: Relative Wealth vs. Relative Wage Effects,"
NBER Working Papers
4192, National Bureau of Economic Research, Inc.
- Klein, Michael W. & Rosengren, Eric, 1994. "The real exchange rate and foreign direct investment in the United States : Relative wealth vs. relative wage effects," Journal of International Economics, Elsevier, vol. 36(3-4), pages 373-389, May.
- Michael W. Klein & Eric S. Rosengren, 1992. "The real exchange rate and foreign direct investment in the United States: relative wealth vs. relative wage effects," Working Papers 92-2, Federal Reserve Bank of Boston.
- Kloek, T, 1981. "OLS Estimation in a Model Where a Microvariable Is Explained by Aggregates and Contemporaneous Disturbances Are Equicorrelated," Econometrica, Econometric Society, vol. 49(1), pages 205-07, January.
- Linda S. Goldberg & Michael W. Klein, 1997.
"Foreign Direct Investment, Trade and Real Exchange Rate Linkages in Developing Countries,"
NBER Working Papers
6344, National Bureau of Economic Research, Inc.
- Linda S. Goldberg & Michael Klein, 1996. "Foreign direct investment, trade, and real exchange rate linkages in developing countries," Proceedings, Federal Reserve Bank of San Francisco, pages 73-100.
- Collins, W-J & O'Rourke, K-H & Williamson, J-G, 1997.
"Were Trade and Factor Mobility Substitutes in History?,"
97/15, College Dublin, Department of Political Economy-.
- William J. Collins & Kevin H. O'Rourke & Jeffrey Williamson, 1997. "Were Trade and Factor Mobility Substitutes in History?," NBER Working Papers 6059, National Bureau of Economic Research, Inc.
- Collins, William J & O'Rourke, Kevin H & Williamson, Jeffrey G, 1997. "Were Trade and Factor Mobility Substitutes in History?," CEPR Discussion Papers 1661, C.E.P.R. Discussion Papers.
- Robert E. Lipsey & Robert C. Feenstra & Carl H. Hahn & George N. Hatsopoulos, 1999.
"The Role of Foreign Direct Investment in International Capital Flows,"
in: International Capital Flows, pages 307-362
National Bureau of Economic Research, Inc.
- Robert E. Lipsey, 2000. "The Role of Foreign Direct Investment in International Capital Flows," NBER Working Papers 7094, National Bureau of Economic Research, Inc.
- Purvis, Douglas D, 1972.
"Technology, Trade and Factor Mobility,"
Royal Economic Society, vol. 82(327), pages 991-99, September.
- Schmitz, Andrew & Helmberger, Peter, 1970. "Factor Mobility and International Trade: The Case of Complementarity," American Economic Review, American Economic Association, vol. 60(4), pages 761-67, September.
- Froot, Kenneth A & Stein, Jeremy C, 1991.
"Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach,"
The Quarterly Journal of Economics,
MIT Press, vol. 106(4), pages 1191-217, November.
- Kenneth A. Froot & Jeremy C. Stein, 1992. "Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach," NBER Working Papers 2914, National Bureau of Economic Research, Inc.
- Lars E.O. Svensson, 1982.
"Factor Trade and Goods Trade,"
NBER Working Papers
0999, National Bureau of Economic Research, Inc.
- Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
- James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
- Wong, Kar-yiu, 1986. "Are international trade and factor mobility substitutes?," Journal of International Economics, Elsevier, vol. 21(1-2), pages 25-43, August.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral 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: ().
If references are entirely missing, you can add them using this form.