Standard horizontal FDI models predict substitutability between FDI and exports in light of the proximity-concentration trade-off, nonetheless, empirical literature finds, almost invariably, a complementarity effect. We argue that given the multi-product nature of the vast majority of firms, FDI...

This paper intends to combine two fields in the economic literature by examining empirically the FDI pattern - horizontal versus vertica l- within the European Union and the relevance of trade integration as a potential determinant of investment flows over the period 1995-2009. We capture trade...

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...

Trade economists have for long considered gravity models to estimate unexhausted potentials for bilateral trade. Similar to the discrepancy between "normal" and "actual" bilateral trade, one may ask the question about the difference between "normal" and actual bilateral multinational activity....