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How Far Away is an Intangible? Services FDI and Distance
Author(s) -
Davies Ronald B.,
Guillin Amélie
Publication year - 2014
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12142
Subject(s) - foreign direct investment , geographical distance , goods and services , distance decay , international economics , trade in services , economics , business , investment (military) , international trade , economic geography , trade barrier , economy , macroeconomics , political science , population , demography , sociology , politics , law
Foreign direct investment ( FDI ) in services has grown significantly in recent years. Evidence of spatial relationships in FDI decisions have been provided for goods manufacturing by utilising physical distance‐based measures of trade costs. This paper investigates spatial interactions for services FDI using several distance measures, including physical distance, genetic distance and transport time. Across different measures of distance, the traditional determinants of outbound FDI activity remain valid for services. We also find spatial interdependence for services FDI that is generally supportive of export‐platform FDI .