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Cited by 256

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Does Economic Integration Cause Foreign Direct Investment?

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Motta, Massimo, Norman, George·1996·International Economic Review

Abstract

The authors analyze the effect of economic integration on oligopolists' international trade and foreign direct investment activities, using a three-country, three-firm model. Increased country size leads to dispersed foreign direct investment, while improved market accessibility leads to export-platform foreign direct investment. Increased intraregional market accessibility prompts outside firms to invest in the regional bloc, reducing product prices, profits of intrabloc firms, and increasing total surplus. Integrating economies are more likely to gain from improving intraregional market accessibility than from tougher external trade policy, and may wish to offer investment incentives to encourage foreign direct investment by outside firms. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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Metadata

Authors
Motta, M., & Norman, G.
Venue
International Economic Review
Publisher
JSTOR
Published
1996-11
Volume
37
Issue
4
Pages
757
ISSN
0020-6598 (ISSN-L)
OpenAlex
W1604796506
Cited by
256
References
0
FWCI
4.19
Type
journal article
Language
en
Open access
green

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CoChat. (2026). Citation check: Does Economic Integration Cause Foreign Direct Investment? https://app.cochat.ai/papers/10.2307/2527310
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Motta, M., & Norman, G. (1996). Does Economic Integration Cause Foreign Direct Investment? International Economic Review. https://doi.org/10.2307/2527310

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Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.