世界经济教资料 8. fdi.pptVIP

Multinationals When are trade and FDI substitutes? Can FDI complement trade? -- as long as transport costs and trade barriers are low enough, FDI can be used to reduce total costs by locating different stages of overall production in different countries which leads to more trade; -- but FDI and trade can sometimes be complements; Multinationals In the case in which foreign affiliates undertake the same kind of production as that of the parent firm or other affiliates, FDI and trade could be substitutes or complements . -- when scale economies are less important, or when transport costs and trade barriers are higher, foreign production through direct investment substitute for international trade; Multinationals The effects of this kind of FDI on trade are actually more complex; is likely to promote or complement trade. -- the affiliates’ production of the final product requires components and materials as inputs into production; -- this FDI can increase trade in final products because the affiliate improves the marketing of all of the firm’s products in the host country. Multinationals The overall relationship -- Most studies conclude that FDI , on average, is somewhat complementary to international trade. Multinationals Would the home country restrict FDI outflows? the effect on workers and others who provide inputs into production in the home country. The effects on the owners of the multinational enterprises based in this home country. Multinationals Should the home country restrict FDI outflows? The effects on the government budget, esp. the effects on government tax revenues. Any external benefits or costs associated with direct investments out of the country. Multinationals Should the host country restrict FDI inflows? Direct economic effects -- Workers in the host country gain from increased demand for their services, as do other suppliers of inputs to the affiliates of foreign multinationals. -- The host country government gains from the taxes collected o