An overlooked aspect of agglomeration economies, which are positive externalities that stem from the geographic clustering of industry, is that firms contribute to the externality in addition to benefiting from the externality. This insight suggests that if firms are heterogeneous they will differ i
Foreign direct investment and global sourcing choices of firms in the US
β Scribed by Hong Y Park
- Publisher
- John Wiley and Sons
- Year
- 2000
- Tongue
- English
- Weight
- 92 KB
- Volume
- 21
- Category
- Article
- ISSN
- 0143-6570
- DOI
- 10.1002/mde.983
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β¦ Synopsis
Abstract
This paper investigates factors affecting the global sourcing choices of firms in the US: (1) US investment abroad; (2) foreign direct investment in the US; (3) wageβproductivity ratio; and (4) transaction cost. I found that there is a statistically significant association between the country of sourcing choices and foreign direct investment. Both the wageβproductivity ratios and transaction costs are not statistically significant at the conventional significance level, but their regression coefficients show proper signs. The paper also examines the patterns of foreign direct investment among countries and compares transaction costs by income group. Copyright Β© 2000 John Wiley & Sons, Ltd.
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