Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69995
Authors: 
Milliou, Chrysovalantou
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper: Industrial Organisation 4117
Abstract: 
We provide an alternative explanation for the commonly observed FDI in developed countries (DCs) considering a vertically related market structure and endogenizing vertical technology transfer (VTT). We show that even though VTT is more costly in a less developed country (LDC), a multinational does not always transfer less technology there than in a DC. Moreover, we show that a multinational sometimes locates its FDI in a DC where, although downstream competition is stronger than in a LDC, it can obtain the input at better terms due to VTT. Independently of whether the host country is more or less developed, FDI is always welfare-enhancing.
Subjects: 
foreign direct investment
host country
vertical relations
developed countries
JEL: 
L13
F12
F23
Document Type: 
Working Paper

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