Hunting High and Low for Vertical FDI
Recently the two dominant models of foreign direct investment (FDI), the horizontal and vertical models, have been synthesized into the knowledge capital (KK) model. Empirical tests, however, have found that the horizontal model cannot be rejected in favor of the KK model. This paper suggests that this is because the empirical specifications used do not allow the vertical aspects of FDI to manifest themselves. By extending the specification, I find evidence of vertical FDI. In particular, when I use the stock of FDI as my measure of FDI activity I can reject the horizontal model in favor of the KK model and identify countries for which FDI is dominated by vertical investment.
|Date of creation:||01 Aug 2002|
|Date of revision:||01 Aug 2002|
|Contact details of provider:|| Postal: |
Phone: (541) 346-4661
Fax: (541) 346-1243
Web page: http://economics.uoregon.edu/Email:
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ore:uoecwp:2002-12. 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: (Bill Harbaugh)
If references are entirely missing, you can add them using this form.