Technological Asymmetries and Strategic Plant Location: The Case of Export-Platform Foreign Direct Investment

GEP Research Paper No. 2006/35

26 Pages Posted: 20 Nov 2006

See all articles by Alessandra Guariglia

Alessandra Guariglia

Durham University - Durham Business School

Arijit Mukherjee

University of Nottingham - School of Economics

Kullapat Suetrong

University of Nottingham

Date Written: 2006

Abstract

We consider the plant location decision of a multinational corporation (MNC), which has the option to invest in a more or in a less technologically lagging country, and which aims to use its foreign plant as an export-platform. We show that the plant location decision of the MNC depends on whether the host country firms can export, and on whether they are able to compete in the product market. We also show that a conflict of interest does not necessarily arise between the plant location decision of the MNC and the preferences of the host countries' governments.

Keywords: Export-platform foreign direct investment, Plant location, Technological asymmetries

JEL Classification: D43, F12, F23, L11, L13

Suggested Citation

Guariglia, Alessandra and Mukherjee, Arijit and Suetrong, Kullapat, Technological Asymmetries and Strategic Plant Location: The Case of Export-Platform Foreign Direct Investment (2006). GEP Research Paper No. 2006/35, Available at SSRN: https://ssrn.com/abstract=945597 or http://dx.doi.org/10.2139/ssrn.945597

Alessandra Guariglia (Contact Author)

Durham University - Durham Business School ( email )

Durham Business School
Mill Hill Lane
Durham, DH1 3LB
United Kingdom

Arijit Mukherjee

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 9514733 (Phone)
+44 115 9514159 (Fax)

Kullapat Suetrong

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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