We show that traditional gravity variables play a significant role in explaining trade flows related to global value chain participation. We find evidence that cooperation costs - measured by linguistic and geographical proximity - are more relevant for trade that reflects cross-border...

This paper links global value chain (GVC) integration and operations of multinational enterprises (MNEs) in the context of host economies upgrading. Economic upgrading is referred to as higher exported value added that has been generated in the domestic economy as a result of foreign direct...

We analyse the nature of German trade-FDI linkages within the EU27 based on a simultaneous equation gravity approach for imports, exports, in- and outward FDI stocks. We adopt both a Hausman-Taylor (1981) IV approach (3SLS-GMM) and rival non-IV estimation (the system extension to the Fixed...

We examine the relationship between Japanese FDI outflows, domestic and foreign fixed investment, and the exchange rate. The results indicate that aggregate FDI outflows have been driven by investment in Japan and the exchange rate, while the geographic distribution of such investment has been...

We analyze the impact of multinational enterprises (MNEs), via their foreign direct investment (FDI), on domestic firms in 30 European host economies, from 2001 to 2013. We incorporate international industrial and trade linkages into a standard theoretical framework and test them empirically on...

We offer a general equilibrium analysis of Brexit incorporating the state-of-the-art differences in productivity and firms' selection within manufacturing sectors à la Melitz (2003) and multinationals in services. Trade, output and average productivity diminish across most sectors in the UK and...

Cointegration technique and error correction model was employed to examine the longrun causal nexus between foreign direct investment and foreign trade (imports and exports) in India. The data bases were on monthly basis and it covered from July 1992 to October 2003. By and large, the analysis...

We examine how Korea's capital flows and trade have been affected by the quantitative easing (QE) of the United States and the quantitative and qualitative easing (QQME) of Japan. Korea is an intriguing case due to its borderline position between advanced and emerging market country groups, and...

The paper presents econometric analysis of relationship between foreign direct investment and international trade. Theory suggests that complementarity or substitutability between exports/imports and FDI depend on types of FDI and disaggregation level. Nevertheless, most empirical works find...