To serve foreign markets, firms can either export or set up a local subsidiary through horizontal Foreign Direct Investment (FDI). The conventional proximity-concentration theory suggests that FDI substitutes for trade if distance between countries is large, while exports become more important...

This research seeks to analyze the export differences facing countries in the EU and EFTA. This is firstly to analyze the effects on international trade of the trade bloc of the European Union (EU), and secondly the European Free Trade Association (EFTA), and provide a comparison of these two....