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 model featuring non-homothetic preferences for quality and...