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FDI vs. Exports: Accounting for Differences in Export-Sales Intensities

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  • Miguel Ricaurte
  • Katherine Schmeiser

Abstract

Industry level data shows striking differences among sectors in ratios of exports to FDI sales. We determine what is needed to endogenously generate this pattern of export and FDI sales. By calibrating a model of monopolistic competitive firms, we find that tradability of goods is not enough to capture the observed sectoral differences, as is commonly assumed. We explore variants of the model and show that sector-specific taxes on multinationals and home bias allow us to replicate these differences.

Suggested Citation

  • Miguel Ricaurte & Katherine Schmeiser, 2009. "FDI vs. Exports: Accounting for Differences in Export-Sales Intensities," Working Papers Central Bank of Chile 523, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:523
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_523.pdf
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    References listed on IDEAS

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