IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

FDI as an Export-Platform: A Gravity Model for the Danish Agri-Food Industry

  • Luljeta Hajderllari

    ()

    (Institute of Food and Resource Economics, University of Copenhagen)

  • Kostas Karantininis

    ()

    (Institute of Food and Resource Economics, University of Copenhagen
    Swedish University of Agricultural Sciences (SLU))

  • Lartey G. Lawson

    ()

    (Department of Business and Management, University of Aalborg)

We investigate factors affecting Foreign Direct Investment (FDI) outflow from Danish agri-food firms to the rest of the world. We develop a conceptual model and subsequently use a gravity model based on data from 127 countries receiving Danish FDI in agri-food in 2004-2008. We find higher Danish FDI towards countries with large exports of agri-food, thereby supporting the hypothesis that FDI is used as an export-platform. FDI is coupled with high exports from Denmark, probably of raw or semi-processed food products for further processing and exports. We also find that FDI is higher in countries with stable political regimes.

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://okonomi.foi.dk/workingpapers/WPpdf/WP2012/WP_2012_7_FDI_platform.pdf
Download Restriction: no

Paper provided by University of Copenhagen, Department of Food and Resource Economics in its series IFRO Working Paper with number 2012/7.

as
in new window

Length: 32 pages
Date of creation: May 2012
Date of revision:
Handle: RePEc:foi:wpaper:2012_7
Contact details of provider: Web page: http://www.ifro.ku.dk/english/
Email:


More information through EDIRC

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. Alan V. Deardorff, 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Working Papers 5377, National Bureau of Economic Research, Inc.
  2. Pol Antràs, 2003. "Firms, Contracts, and Trade Structure," NBER Working Papers 9740, National Bureau of Economic Research, Inc.
  3. Nils Herger & Christos Kotsogiannis & Steve McCorriston, 2008. "Cross-border acquisitions in the global food sector," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(4), pages 563-587, December.
  4. Melitz, Jacques, 2005. "North, South and Distance in the Gravity Model," CEPR Discussion Papers 5136, C.E.P.R. Discussion Papers.
  5. M. Giulietti & S. Mccorriston & P. Osborne, 2004. "Foreign direct investment in the UK: evidence from a disaggregated panel of the UK food sector," Applied Economics, Taylor & Francis Journals, vol. 36(7), pages 653-663.
  6. Paul Brenton & Francesca Di Mauro & Matthias Lücke, 1999. "Economic Integration and FDI: An Empirical Analysis of Foreign Investment in the EU and in Central and Eastern Europe," Empirica, Springer, vol. 26(2), pages 95-121, June.
  7. Bruce A. Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," NBER Working Papers 11299, National Bureau of Economic Research, Inc.
  8. Henri L. F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2004. "The Institutional Determinants of Bilateral Trade Patterns," Kyklos, Wiley Blackwell, vol. 57(1), pages 103-123, 02.
  9. Jun Ruan & Munisamy Gopinath, 2008. "Global productivity distribution and trade liberalisation: evidence from processed food industries," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(4), pages 439-460, December.
  10. Gordon H. Hanson & Raymond J. Mataloni & Matthew J. Slaughter, 2005. "Vertical Production Networks in Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 664-678, November.
  11. Peter Egger, 2001. "European exports and outward foreign direct investment: A dynamic panel data approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(3), pages 427-449, September.
  12. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  13. Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
  14. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2003. "Trade Facilitation and Economic Development: A New Approach to Quantifying the Impact," World Bank Economic Review, World Bank Group, vol. 17(3), pages 367-389, December.
  15. Jeffrey A. Frankel & Ernesto Stein & Shang-Jin Wei, 1993. "Continental Trading Blocs: Are They Natural, or Super-Natural?," NBER Working Papers 4588, National Bureau of Economic Research, Inc.
  16. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
  17. Munisamy Gopinath & Rodrigo Echeverria, 2004. "Does Economic Development Impact the Foreign Direct Investment-Trade Relationship? A Gravity-Model Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 782-787.
  18. Peter Egger & Michael Pfaffermayr, 2004. "Distance, trade and FDI: a Hausman-Taylor SUR approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(2), pages 227-246.
  19. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  20. Robert C. Feenstra & James R. Markusen & Andrew K. Rose, 2001. "Using the gravity equation to differentiate among alternative theories of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 430-447, May.
  21. Guedae Cho & Ian M. Sheldon & Steve McCorriston, 2002. "Exchange Rate Uncertainty and Agricultural Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 931-942.
  22. Mehrdad Vahabi, 2011. "Appropriation, violent enforcement and transaction costs : a critical survey," Post-Print hal-00629109, HAL.
  23. Baltagi, Badi H. & Egger, Peter & Pfaffermayr, Michael, 2007. "Estimating models of complex FDI: Are there third-country effects?," Journal of Econometrics, Elsevier, vol. 140(1), pages 260-281, September.
  24. Keith Head & John Ries, 2004. "Exporting and FDI as Alternative Strategies," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 409-423, Autumn.
  25. Frankel, Jeffrey & Rose, Andrew K., 2001. "An Estimate of the Effect of Common Currencies on Trade and Income," Working Paper Series rwp01-013, Harvard University, John F. Kennedy School of Government.
  26. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
  27. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
  28. Helpman, Elhanan, 1981. "International trade in the presence of product differentiation, economies of scale and monopolistic competition : A Chamberlin-Heckscher-Ohlin approach," Journal of International Economics, Elsevier, vol. 11(3), pages 305-340, August.
  29. Gopinath, Munisamy & Pick, Daniel H. & Vasavada, Utpal, 1998. "The Economics Of Foreign Direct Investment And Trade With An Application To The U.S. Food Processing Industry," Working Papers 51205, International Agricultural Trade Research Consortium.
  30. Anne-Célia Disdier & Keith Head, 2004. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," Development Working Papers 186, Centro Studi Luca d\'Agliano, University of Milano.
  31. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
  32. Daniel Pick & Utpal Vasavada, 1998. "Exchange Rate Effects on the Relationship between FDI and Trade in the U.S. Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1073-1079.
  33. Ghosh, Sucharita & Yamarik, Steven, 2004. "Are regional trading arrangements trade creating?: An application of extreme bounds analysis," Journal of International Economics, Elsevier, vol. 63(2), pages 369-395, July.
  34. László Mátyás, 1998. "The Gravity Model: Some Econometric Considerations," The World Economy, Wiley Blackwell, vol. 21(3), pages 397-401, 05.
  35. Mitze, Timo & Alecke, Björn & Untiedt, Gerhard, 2008. "Trade, FDI and Cross-Variable Linkages: A German (Macro-)Regional Perspective," MPRA Paper 12245, University Library of Munich, Germany.
  36. Feenstra, Robert C, 2002. "Border Effects and the Gravity Equation: Consistent Methods for Estimation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 491-506, December.
  37. Bruce A. Blonigen & Ronald B. Davies & Glen R. Waddell & Helen T. Naughton, 2004. "FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment," NBER Working Papers 10939, National Bureau of Economic Research, Inc.
  38. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
  39. M. T. Alguacil & V. Orts, . "Inward Foreign Direct Investment and Imports in Spain," Working Papers on International Economics and Finance 02-01, FEDEA.
  40. Marchant, Mary A. & Cornell, Dyana N. & Koo, Won W., 2002. "International Trade And Foreign Direct Investment: Substitutes Or Complements?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(02), August.
  41. Steve McCorriston & Ian M. Sheldon, 1998. "Cross-Border Acquisitions and Foreign Direct Investment in the U.S. Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1066-1072.
  42. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, vol. 91(2), pages 386-390, May.
  43. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, vol. 20(3), pages 363-368, 05.
  44. Chengang Wang & Yingqi Wei & Xiaming Liu, 2010. "Determinants of Bilateral Trade Flows in OECD Countries: Evidence from Gravity Panel Data Models," The World Economy, Wiley Blackwell, vol. 33(7), pages 894-915, 07.
  45. Peter Walkenhorst;, 2001. "Determinants of foreign direct investment in the food industry: The case of Poland," Agribusiness, John Wiley & Sons, Ltd., vol. 17(3), pages 383-395.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:foi:wpaper:2012_7. 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: (Geir Tveit)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.