LEADER-FOLLOWER MODEL OF RECIPROCAL FDI AND INTERNATIONAL TRADE

Andrzej Cieślik In this paper we develop a two-country leader-follower model of reciprocal horizontal foreign direct investment (FDI) and international trade. First, we identify the conditions necessary for exporting and FDI depending on trade costs and the cost of foreign investment. Then, we demonstrate how various types of equilibriums may emerge in the short run […]