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How Far Away is an Intangible? Services FDI and Distance

  • Ronald B. Davies

    ()

    (University College Dublin; Institute for International Integration Studies, Trinity College Dublin)

  • Amelie Guillin

    ()

    (University College Dublin, Paris School of Economics, University of Paris I)

Foreign direct investment (FDI) in services has grown significantly in recent years. Evidence of spatial relationships in FDI decisions have been provided for goods manufacturing by utilizing physical distance-based measures of trade costs. This paper investigates spatial interactions for services FDI using several distance measures, including physical distance, genetic distance, and transport time. Across different measures of distance, the traditional determinants of outbound FDI activity remain valid for services. We also find spatial interdependence for services FDI that is generally supportiveof complex vertical motivations.

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Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp380.

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Length: 25 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:iis:dispap:iiisdp380
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