Foreign Direct Investment, Production, and Welfare

Arbeitspapier

We study the impact of foreign direct investment using a macroeconomic two-sector model of the small open economy with exible exchange rates and perfect capital mobility. The focus is on horizontal greenfield investment and its effects on production, exchange rates, exports, imports, and welfare. In the host country, FDI harms the established industries. Despite this incoming FDI increases welfare. In the home country, FDI lowers domestic output of the established industries, too, and decreases welfare.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionspapier ; No. 11

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Open Economy Macroeconomics
• Subject: Foreign Direct Investment ; small open economy ; welfare effects ; Direktinvestition ; Kleines-offenes-Land ; Makroökonomischer Einfluß ; Wohlfahrtseffekt ; Mehr-Sektoren-Modell ; Zwei-Länder-Modell ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Otto, Alkis Henri
• Event: Veröffentlichung
• (who): Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre
• (where): Hamburg
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/23529
• URN: urn:nbn:de:gbv:705-opus-1455
• Last update: 10.03.2025, 11:44 AM CET