Journal of Political Economy Vol. 85 No. 2 1977
Foreign Direct Investment in Manufacturing
Abstract
The purpose of this paper is to present a simple model, based on profit-maximizing behavior, that can be used to derive estimable equations for U.S. foreign direct investment in manufacturing. Our estimation of foreign-investment equations requires estimates of production functions for U.S. manufacturing subsidiaries abroad. Specifically, I estimate the production function to be a constant-returns-to-scale, homogeneous, transcendental logarithmic function. I also present evidence in the form of my estimated foreign-direct-investment equation that domestic and foreign markets may be imperfectly competitive.
- DOI
- 10.1086/260563
- Volume
- 85
- Issue
- 2
- Pages
- 283-297
- Language
- en
- Sources
- openalex crossref