eprintid: 3660
rev_number: 16
eprint_status: archive
userid: 6
dir: disk0/00/00/36/60
datestamp: 2017-03-10 08:59:24
lastmod: 2017-03-21 11:08:28
status_changed: 2017-03-10 08:59:24
type: monograph
metadata_visibility: show
creators_name: Metulini, Rodolfo
creators_name: Riccaboni, Massimo
creators_name: Sgrignoli, Paolo
creators_name: Zhu, Zhen
creators_id: 
creators_id: massimo.riccaboni@imtlucca.it
creators_id: paolo.sgrignoli@alumni.imtlucca.it
creators_id: zhen.zhu@imtlucca.it
title: The Indirect Effects of FDI on Trade: A Network Perspective
ispublished: pub
subjects: HB
subjects: HD28
divisions: EIC
full_text_status: public
monograph_type: imt_eic_working_paper
keywords: Keywords: Networks; Foreign direct investment; Corporate control  -  
JEL classification: C21; F10; F14; F23; L22
abstract: The relationship between international trade and foreign direct invest-
ment (FDI) is one of the main features of globalization. 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 minimize coordination costs, and to break barriers to market entry.
We use a unique data set of international corporate control as a measure
of stock FDI to construct a corporate control network (CCN) where the
nodes are the countries and the edges are the corporate control relation-
ships. Based on the CCN, the network measures, i.e., the shortest path
length and the communicability, are computed to capture the indirect
channel of FDI. Empirically we find that corporate control has a positive
effect on trade both directly and indirectly. The result is robust with dif-
ferent specifications and estimation strategies. Hence, our paper provides
strong empirical evidence of the indirect effects of FDI on trade. More-
over, we identify a number of interplaying factors such as regional trade
agreements and the region of Asia. We also find that the indirect effects
are more pronounced for manufacturing sectors than for primary sectors
such as oil extraction and agriculture.
date: 2017-03
date_type: published
number: 4
publisher: IMT School for Advanced Studies Lucca
pages: 33
institution: IMT Institute for Advanced Studies Lucca
issn: 2279-6894
citation:   Metulini, Rodolfo and Riccaboni, Massimo and Sgrignoli, Paolo and Zhu, Zhen  The Indirect Effects of FDI on Trade: A Network Perspective.  EIC working paper series  #4/2017    IMT School for Advanced Studies Lucca    ISSN 2279-6894.      
document_url: http://eprints.imtlucca.it/3660/1/EIC_WP_4_2017.pdf