EXPLAINING TRADE AND FDI RELATIONSHIPS IN A GRAVITY MODEL

Foi apresentado no 48th Congress of the European Regional Science Association, ERSA 2008, em Liverpool, o trabalho de Cristiano Cechella e Joaquim Silva da Universidade Técnica de Lisboa (ISEG) e Tomaz Dentinho do Departamento de Ciências Agrárias da Universidade dos Açores com o título:"EXPLAINING TRADE AND FDI RELATIONSHIPS IN A GRAVITY MODEL".

According to models based on Hecksher-Ohlin seminal theory of international economics, trade and foreign investment are taken as substitutes. Nevertheless that is not consensual. The aim of this paper is to analyze the relations between trade and foreign investment based on a gravity model. The explanatory variables of the model are the physical distances between countries, their incomes, dummies for each country and standardized indicators of foreign investment attractiveness. The parameters to be estimated are the distance attrition, the coefficients associated to the foreign investment, and the dummies coefficients which can be seen as extra costs and or benefits attributable to each country that are not explicit in the physical distance.