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There are two main options for companies to serve foreign markets; exports and foreign direct investment (FDI). Based on the Helpman, Melitz and Yeaple (2004) model for two host countries this paper derives a clear theoretical prediction for the decision between both strategies. A bivariate...
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firms less (more) probably use the export (FDI) strategy to serve foreign markets. Moreover, a considerable number of …. -- Heterogeneous Firms ; Exports ; Foreign Direct Investment ; Multiple Host Countries ; Bivariate Probit Estimation …
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; foreing direct investment ; three nations model ; bivariate probit estimation …
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firms export …
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Whether a firm is able to attract foreign capital and whether it may participate at the export market depends on …. These findings are established through the estimation of a spatial bivariate probit model …
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