Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/23529
Authors: 
Otto, Alkis Henri
Year of Publication: 
2003
Series/Report no.: 
Diskussionspapier / Helmut-Schmidt-Universität Hamburg, Fächergruppe Volkswirtschaftslehre 11
Abstract: 
We study the impact of foreign direct investment using a macroeconomic two-sector model of the small open economy with exible exchange rates and perfect capital mobility. The focus is on horizontal greenfield investment and its effects on production, exchange rates, exports, imports, and welfare. In the host country, FDI harms the established industries. Despite this incoming FDI increases welfare. In the home country, FDI lowers domestic output of the established industries, too, and decreases welfare.
Subjects: 
Foreign Direct Investment
small open economy
welfare effects
JEL: 
F21
F41
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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