Economic theory has not been delving extensively and systematically into the strictly related phenomena of Foreign Direct Investment (FDI) and Multinational Enterprise (MNE) until the 1980s. Two distinct circumstances have been favouring this recent renewed interest: a big surge in the former and a new space for the latter in the mainstream economic theory. FDI – the main way through which MNEs act – has been growing recently at an impressive rate (more than world trade), and that this growth has had the puzzling feature of concerning particularly the industrialised countries, which have been reciprocally engaged in such capital movements. The emergence of a new body of trade and location theory made it possible to enhance the understanding of this phenomenon. The overall theme is on the frontier of the research in international trade and applied industrial economics, and it is complex and unsettled. The subject of this work is just to fix up ideas about some selected topics. Since the main topic of this book is new directions in economic geography, we will concentrate here on those aspects of FDI which are more closely related to spatial aspects and which either support or oppose the prescriptions of NEG theory. Thus, we will avoid organizing the discussion around the home-host country effects of FDI, which would force us to take into considerations elements which are beyond the scope here, such as the effects on employment in the source country or those on growth in the destination countries. This last topic, which is highly controversial, has been surveyed many times, as we recalled earlier. We will look very briefly at the internalisation issue - which has traditionally been part of business economics - since the new trade theory is starting to incorporate it. Some more attention will be devoted to a widely discussed topic - the relationship between FDI and trade - since it gives interesting insights on the more recent theory of FDI coming out of the NEG approach. Studies inquiring about ‘location’ will be considered for the same reasons. Furthermore, the studies on transition-economies will be more extensively reviewed since they might represent a ‘laboratory’ test of the NEG in-so-far as FDI is occurring in a vacuum: no trade, high NT barriers, adverse institutions, and no tradition of FDI at all. Last but not least, we will not enter into the technical aspects of empirical evaluation, since the methods used - tools, data, sample, time span, and others – vary so widely that it is almost impossible to make a meaningful comparison. We concentrate here on those aspects of FDI which are more closely related to spatial aspects and which either support or oppose the prescriptions of NEG theory. We avoid organizing the discussion around the home-host country effects of FDI, which would force us to take into considerations elements which are beyond the scope here, such as the effects on employment in the source country or those on growth in the destination countries. This last topic, which is highly controversial, has been surveyed many times. We will look very briefly at the internalisation issue - which has traditionally been part of business economics - since the new trade theory is starting to incorporate it. Some more attention will be devoted to a widely discussed topic - the relationship between FDI and trade - since it gives interesting insights on the more recent theory of FDI coming out of the NEG approach. Studies inquiring about ‘location’ will be considered for the same reasons. Furthermore, the studies on transition-economies will be more extensively reviewed since they might represent a ‘laboratory’ test of the NEG in-so-far as FDI is occurring in a vacuum: no trade, high NT barriers, adverse institutions, and no tradition of FDI at all. Last but not least, we will not enter into the technical aspects of empirical evaluation, since the methods used - tools, data, sample, time span, and others – vary so...
FDI: a difficult connection between theory and empirics
SOCI, ANNA
2007
Abstract
Economic theory has not been delving extensively and systematically into the strictly related phenomena of Foreign Direct Investment (FDI) and Multinational Enterprise (MNE) until the 1980s. Two distinct circumstances have been favouring this recent renewed interest: a big surge in the former and a new space for the latter in the mainstream economic theory. FDI – the main way through which MNEs act – has been growing recently at an impressive rate (more than world trade), and that this growth has had the puzzling feature of concerning particularly the industrialised countries, which have been reciprocally engaged in such capital movements. The emergence of a new body of trade and location theory made it possible to enhance the understanding of this phenomenon. The overall theme is on the frontier of the research in international trade and applied industrial economics, and it is complex and unsettled. The subject of this work is just to fix up ideas about some selected topics. Since the main topic of this book is new directions in economic geography, we will concentrate here on those aspects of FDI which are more closely related to spatial aspects and which either support or oppose the prescriptions of NEG theory. Thus, we will avoid organizing the discussion around the home-host country effects of FDI, which would force us to take into considerations elements which are beyond the scope here, such as the effects on employment in the source country or those on growth in the destination countries. This last topic, which is highly controversial, has been surveyed many times, as we recalled earlier. We will look very briefly at the internalisation issue - which has traditionally been part of business economics - since the new trade theory is starting to incorporate it. Some more attention will be devoted to a widely discussed topic - the relationship between FDI and trade - since it gives interesting insights on the more recent theory of FDI coming out of the NEG approach. Studies inquiring about ‘location’ will be considered for the same reasons. Furthermore, the studies on transition-economies will be more extensively reviewed since they might represent a ‘laboratory’ test of the NEG in-so-far as FDI is occurring in a vacuum: no trade, high NT barriers, adverse institutions, and no tradition of FDI at all. Last but not least, we will not enter into the technical aspects of empirical evaluation, since the methods used - tools, data, sample, time span, and others – vary so widely that it is almost impossible to make a meaningful comparison. We concentrate here on those aspects of FDI which are more closely related to spatial aspects and which either support or oppose the prescriptions of NEG theory. We avoid organizing the discussion around the home-host country effects of FDI, which would force us to take into considerations elements which are beyond the scope here, such as the effects on employment in the source country or those on growth in the destination countries. This last topic, which is highly controversial, has been surveyed many times. We will look very briefly at the internalisation issue - which has traditionally been part of business economics - since the new trade theory is starting to incorporate it. Some more attention will be devoted to a widely discussed topic - the relationship between FDI and trade - since it gives interesting insights on the more recent theory of FDI coming out of the NEG approach. Studies inquiring about ‘location’ will be considered for the same reasons. Furthermore, the studies on transition-economies will be more extensively reviewed since they might represent a ‘laboratory’ test of the NEG in-so-far as FDI is occurring in a vacuum: no trade, high NT barriers, adverse institutions, and no tradition of FDI at all. Last but not least, we will not enter into the technical aspects of empirical evaluation, since the methods used - tools, data, sample, time span, and others – vary so...I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
