How Far Away is an Intangible? Services FDI and Distance
26 Pages Posted: 6 Oct 2011
There are 2 versions of this paper
How Far Away is an Intangible? Services FDI and Distance
How Far Away is an Intangible? Services FDI and Distance
Date Written: September 30, 2011
Abstract
Foreign direct investment (FDI) in services has grown significantly in recent years. Evidence of spatial relationships in FDI decisions have been provided for goods manufacturing by utilizing physical distance-based measures of trade costs. This paper investigates spatial interactions for services FDI using several distance measures, including physical distance, genetic distance, and transport time. Across different measures of distance, the traditional determinants of outbound FDI activity remain valid for services. We also find spatial interdependence for services FDI that is generally supportive of complex vertical motivations.
Keywords: foreign direct investment, services, spatial econometric techniques
JEL Classification: F210, F230
Suggested Citation: Suggested Citation