Authors: Amany Fakher
Addresses: Faculty of Commerce & Business Administration, Helwan University, Cairo, Egypt
Abstract: During the last 30 years, the world economy becomes more globalised and the international trade and FDI were growing faster than many economic activities. The fast growth in international trade is through trade in parts and components which introduced a new phenomenon known as 'international fragmentation of production' and changed the pattern and trends of trade in the world economy. Trade in parts and components has opened up new opportunities for developing countries to participate in world production, which may affect on increase FDI. This paper deals with the relation between trade in parts and components and FDI, both theoretically and empirically, and investigates the effect of trade in parts and components on FDI in Egypt. The empirical analysis finds that trade in parts and components has a significance positive effect on FDI in Egypt during the period 1995-2013. Accordingly, we cannot ignore traditional determinants and institutional determinants (non-traditional determinants).
Keywords: trade patterns; parts; components; international fragmentation; production fragmentation; world trade; foreign direct investment; Egypt; FDI growth.
International Journal of Trade and Global Markets, 2016 Vol.9 No.1, pp.18 - 32
Received: 08 May 2021
Accepted: 12 May 2021
Published online: 12 Jan 2016 *