Kazunobu, HAYAKAWA; Toshiyuki, MATSUURA - Research Institute of Economy, Trade and Industry (RIETI) - 2013
This paper empirically explores the reason why a recent surge of foreign direct investment (FDI) to developing countries has been mainly driven by less productive firms. To this end, we present a simple model of FDI with vertical division of labor in a heterogeneous firm framework. From a...