Melbourne Institute Working Paper Series Database (1984 - 2010)

Melbourne Institute Working Paper No. 12/2006

Relative Factor Abundance and FDI Factor Intensity in Developed Countries

by

Alfons Palangkaraya and Andreas Waldkirch

Date: May 2006

Abstract: This study looks at the link between the patterns of trade-revealed comparative advantage and net inward foreign direct investment in five developed countries: France, Italy, Japan, the United Kingdom, and the United States. Despite assertions that market access is the primary motive for foreign direct investment flows among developed countries, the study confirms an earlier study which found a significant role of comparative advantage in determining inflows of foreign direct investment in developed countries, especially in the services industry.

 

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