Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103753
Authors: 
Harach, Monika
Rodriguez-Crespo, Ernesto
Year of Publication: 
2014
Series/Report no.: 
Kiel Advanced Studies Working Papers 467
Abstract: 
This paper compares the traditional gravity model with a bidirectional approach when multilateral resistance is implemented to analyze the effect of inward foreign direct investment (FDI) on exports. We use cross-sectional HS trade data disaggregated at a 6-digit level in 2010 with controls for HS 2-digit level. Our results show that FDI increases exports only in the in the direction of exporter-importer, and the effect is higher when multilateral resistance is implemented and the effect is different across sections. Our robustness checks show that when FDI is removed, the coefficients and the effect on sectors are similar.
Subjects: 
FDI
bilateral trade
gravity model
cross-section data
Harmonized System 2-digit code
JEL: 
C21
F14
F15
F21
Document Type: 
Working Paper

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