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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.

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File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2012/WP_2012_7_FDI_platform.pdf
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Paper provided by University of Copenhagen, Department of Food and Resource Economics in its series IFRO Working Paper with number 2012/7.

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