Journal article
Information Technology and Bilateral FDI: Theory and Evidence
Journal of economic integration, v 20(4), pp 613-630
01 Dec 2005
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
This paper investigates the impact of communication cost on the FDI activities of multinational corporations (MNCs). First, we provide a theoretical foundation for a gravity-type FDI model, which shows that physical distance and communication technology are important determinants of FDI activities. Second, we apply the ITaugmented gravity model to bilateral FDI data for a total of 47 OECD and nonOECD countries from 1980 to 1997 and find that distance is negatively related to inward FDI stocks while the growth of IT, measured by teledensity and celldensity, has encouraged FDI significantly. The impact is found to be more prominent on FDI from G7 countries to OECD countries, than to non-OECD countries, and more prominent in the 1990s than in the 1980s. Moreover, IT plays a more effective role by reducing communication cost when distance is beyond a threshold range.
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Details
- Title
- Information Technology and Bilateral FDI: Theory and Evidence
- Creators
- Bang Nam Jeon - Drexel UniversityLinghui Tang - University of Southern MississippiLei Zhu - Drexel University
- Publication Details
- Journal of economic integration, v 20(4), pp 613-630
- Publisher
- Sejong Univ, Center Int Economics
- Number of pages
- 18
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000213559000001
- Other Identifier
- 991019330813804721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics