Foreign Direct Investment And Trade: A Generalized Spatial Two Stage Least Squares
Abstract
Within the generalized spatial two stage least squaresframework, this paper test for the relevance of third countryeffects for U.S. outward foreign direct investment (FDI), andalso analyses the relationship between Foreign direct investment and trade. The empirical results indicate the significance of third country effects. Additionally, I find complementary relationship between foreign direct investment and trade.
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