The volatility of offshore investment
1984; Elsevier BV; Volume: 16; Issue: 3 Linguagem: Inglês
10.1016/0304-3878(84)90076-2
ISSN1872-6089
Autores Tópico(s)Global trade and economics
ResumoOffshore investment often bears the image of 'footloose' industry, with little to hinder movement to the most favorable environment. An effort to describe this particular segment of U.S. direct investment supports some elements of the colorful anecdotal portrait painted by critics in the Third World. Semiconductor assemblers are moderately sensitive to wage rates, and adjust quite rapidly in maintaining what they perceive as a diversified portfolio of 'risky' LDC production locations. On the other hand, this reaction is small enough to guarantee that modest increases in wages will not send all investment fleeing from an export platform. New methods of modelling direct foreign investment when risk diversification is important in explaining industrial location decisions are introduced in this paper.
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