Does investment in capacity encourage FDI?

作者：Dong Quan; Carlos Barcena Ruiz Juan

来源：Economic Modelling, 2015, 51: 58-64.

DOI：10.1016/j.econmod.2015.07.016

• North-South trade
• FDI
• Exports
• Capacity
• Imperfect competition

The literature analysing whether firms prefer to engage in FBI or to export has not considered the role played by strategic investment in capacity by firms. To fill this gap we consider two markets North and South and two firms owned by investors from the North, and show that firms have excess capacity. We consider two types of EDI: vertical and horizontal. Examples can be found in industries such as textiles and toys for the former and in automobile industry for the later. We find that investment in capacity encourages vertical FDI but restricts horizontal FDI. Therefore, investment in capacity has an opposite effect on the different types of FDI and so it should be borne in mind by governments when deciding policies affecting FDI.

• 出版日期2015-12
• 单位华南师范大学