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The Impact of FDI on Technological Change and Long-Run Growth

In: The Impact of International Trade and FDI on Economic Growth and Technological Change

Author

Listed:
  • Patricia Hofmann

    (University of Hohenheim)

Abstract

In recent years there has been a blossoming of research on the determinants and effects of FDI on the firm level. This is due not only to increasing availability of micro data but also to one major insight of International Trade Theory: While sticking to the ‘general equilibrium’ standard, models have to deviate from ‘perfect competition’ and ‘constant returns to scale’ assumptions in order to fully appreciate the heterogeneity of the motives for and implications of FDI. Markusen (2008) states that – in contrast to the macroeconomic treatment of FDI as simple capital flow – trade theory has already differentiated since the 1980s between FDI and portfolio investments. However, only recently do the bulk of researchers anatomise further the effects of FDI on different groups (the affiliate firm, competitors, suppliers or the aggregate country) and also distinguish between various forms of FDI (greenfield investment, mergers, foreign acquisitions (majority and minority ownership), joint ventures).

Suggested Citation

  • Patricia Hofmann, 2013. "The Impact of FDI on Technological Change and Long-Run Growth," Contributions to Economics, in: The Impact of International Trade and FDI on Economic Growth and Technological Change, edition 127, chapter 0, pages 101-168, Springer.
  • Handle: RePEc:spr:conchp:978-3-642-34581-4_4
    DOI: 10.1007/978-3-642-34581-4_4
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    Cited by:

    1. K. Dimitris & Am Pinna, 2013. "Trade activity between the EU and its neighboring countries: Trends and potential," Working Paper CRENoS 201320, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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