TY  - JOUR
AU  - Goldberg,Linda S.
AU  - Klein,Michael W.
TI  - International Trade and Factor Mobility:  An Empirical Investigation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7196
PY  - 1999
Y2  - June 1999
UR  - http://www.nber.org/papers/w7196
L1  - http://www.nber.org/papers/w7196.pdf
N1  - Author contact info:
Linda S. Goldberg
Federal Reserve Bank-New York
33 Liberty Street
New York, NY 10045
Tel: 212/720-2836
Fax: 212/720-6831
E-Mail: linda.goldberg@ny.frb.org

Michael W. Klein
Fletcher School
Tufts University
Medford, MA 02155
Tel: (617) 627-2718
Fax: (617) 627-3712
E-Mail: michael.klein@tufts.edu
AB  - Foreign Direct Investment (FDI) has been growing rapidly, at a pace far exceeding the growth in international trade.  Thus, a full understanding of the relationship between trade in goods and FDI is important for obtaining a complete picture of the extent and sources of international linkages.  We investigate whether FDI serves as a complement to trade or a substitute for trade based on the effects identified by the Rybczynski theorem whereby an increase in a factor of production used intensively in one sector affects production both in that sector and in other sectors.  Using detailed data on bilateral capital and trade flows between the United States and individual Latin American countries, we examine the linkages between FDI into particular sectors of Latin American economies and the net exports of those and other manufacturing sectors. We find that FDI from the United States can lead to significant, and varied, shifts in the composition of activity in many Latin American countries and across many manufacturing industries.
ER  -