Resource title

Foreign Direct Investment, Production, and Welfare

Resource image

image for OpenScout resource :: Foreign Direct Investment, Production, and Welfare

Resource description

We study the impact of foreign direct investment using a macroeconomic two-sector model of the small open economy with exible exchange rates and perfect capital mobility. The focus is on horizontal greenfield investment and its effects on production, exchange rates, exports, imports, and welfare. In the host country, FDI harms the established industries. Despite this incoming FDI increases welfare. In the home country, FDI lowers domestic output of the established industries, too, and decreases welfare.

Resource author

Alkis Henri Otto

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/23529

Resource license

Adapt according to the presented license agreement and reference the original author.