Fajgelbaum, Pablo; Grossman, Gene; Helpman, Elhanan - C.E.P.R. Discussion Papers - 2011
We study patterns of FDI in a multi-country world economy. First, we present evidence for a broad sample of countries … that firms direct FDI disproportionately to markets with income levels similar to their home market. Then we develop a …-driven and the decision to serve foreign countries via exports or FDI depends on a proximity-concentration trade-off. We …