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Direct Foreign Investment, Globalization, and Northern Growth: Implications of a North-South Model

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  • Amitava Krishna Dutt

    (Department of Economics, University of Notre Dame, Notre Dame, IN 46556, Dutt.1@nd.edu)

Abstract

A model of North-South trade is developed in which TNCs invest in the South to produce a good competing directly with the Northern good. It implies that the liberalization of direct foreign investment to the South increases the long-run equilibrium rate of both Northern and Southern growth. However, since the long-run equilibriums is likely to be a saddlepoint, the North can be hurt by this globalization.

Suggested Citation

  • Amitava Krishna Dutt, 1996. "Direct Foreign Investment, Globalization, and Northern Growth: Implications of a North-South Model," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(3), pages 102-114, September.
    • Handle: RePEc:sae:reorpe:v:28:y:1996:i:3:p:102-114
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