Intra-industry foreign direct investment
By: Laura Alfaro, Andrew Charlton
Contributors: Charlton, Andrew ‚q (Andrew Henry George) (Andrew Henry George), 1978-; Harvard Business School. Division of Research
Edition: Rev.
Series: Working paper / Harvard Business School -- 08-018; Working paper (Harvard Business School) -- 08-018
Publisher: Harvard Business School
Published: 2007
Place of publication: Boston]
Language: eng
Number of pages: 33
Description: We use a new firm level data set that establishes the location, ownership, and activity of 650,000 multinational subsidiaries-close to a comprehensive picture of global multinational activity. A number of patterns emerge from the data. Most foreign direct investment (FDI) occurs between rich countries. The share of vertical FDI (subsidiaries which provide inputs to their parent firms) is larger than commonly thought, even within developed countries. More than half of all vertical subsidiaries are only observable at the four-digit level because the inputs they are supplying are so proximate to their parent firms' final good that they appear identical at the two-digit level. We call these proximate subsidiaries 'intra-industry' vertical FDI and find that their location and activity are significantly different to the inter-industry vertical FDI visible at the two-digit level.
Notes: "September 2007"--Publisher's web site.

Includes bibliographical references.