Exports and Foreign Investment in the Pharmaceutical Industry

The relationship between direct investment and trade has always been recognized as one of the most difficult aspects of the study of multinational companies and their impact on their own countries and their affiliates' host countries. We cannot solve the fundamental dilemma of the inability to run controlled experiments to determine what would happened in a given instance without direct governmental investment, but we have assembled a better set of data than was available to previous studies. From these we hope to narrow the range of plausible assumptions and, from there on, the range of plausible conclusions. This paper describes some experiments with our data set on a single industry: pharmaceuticals.