The indirect effects of foreign direct investment on trade: A network perspective

What is it about?

The relationship between international trade and foreign direct investment (FDI) is one of the main features of globalisation. In this paper, we investigate the effects of FDI on trade from a network perspective, since FDI takes not only direct but also indirect channels from origin to destination countries because of firms’ incentive to reduce tax burden, to minimise coordination costs and to break barriers to market entry. The paper provides strong empirical evidence of the indirect effects of FDI on trade

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