International Trade and Factor Mobility: An Empirical Investigation
Foreign 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.
|Date of creation:||Jun 1999|
|Date of revision:|
|Publication status:||published as Festschrift in Honor of Robert Mundell, Calvo, G., R. Dornbusch, and M. Obstfeld, eds., Cambridge: MIT Press, 2000.|
|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
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.:
- 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.
- Purvis, Douglas D, 1972.
"Technology, Trade and Factor Mobility,"
Royal Economic Society, vol. 82(327), pages 991-99, September.
- 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.
- 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.
- Robert E. Lipsey, 2000.
"The Role of Foreign Direct Investment in International Capital Flows,"
NBER Working Papers
7094, National Bureau of Economic Research, Inc.
- Robert E. Lipsey & Robert C. Feenstra & Carl H. Hahn & George N. Hatsopoulos, 1999. "The Role of Foreign Direct Investment in International Capital Flows," NBER Chapters, in: International Capital Flows, pages 307-362 National Bureau of Economic Research, Inc.
- Ronald W. Jones, 1967. "International Capital Movements and the Theory of Tariffs and Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 81(1), pages 1-38.
- 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,"
92-2, Federal Reserve Bank of Boston.
- 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 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.
- 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 W. Klein, 1996. "Foreign direct investment, trade, and real exchange rate linkages in developing countries," Proceedings, Federal Reserve Bank of San Francisco, pages 73-100.
- Lars E.O. Svensson, 1982.
"Factor Trade and Goods Trade,"
NBER Working Papers
0999, National Bureau of Economic Research, Inc.
- Wong, Kar-yiu, 1986. "Are international trade and factor mobility substitutes?," Journal of International Economics, Elsevier, vol. 21(1-2), pages 25-43, August.
- Collins, William J & O'Rourke, Kevin Hjortshøj & Williamson, Jeffrey G, 1997.
"Were Trade and Factor Mobility Substitutes in History?,"
CEPR Discussion Papers
1661, C.E.P.R. Discussion Papers.
- 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, W-J & O'Rourke, K-H & Williamson, J-G, 1997. "Were Trade and Factor Mobility Substitutes in History?," Papers 97/15, College Dublin, Department of Political Economy-.
- 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.
- Kenneth A. Froot & Jeremy C. Stein, 1991. "Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1191-1217.
- 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.
- Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:7196. 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: ()
If references are entirely missing, you can add them using this form.