01925cam a22002777 4500001000700000003000500007005001700012008004100029100001800070245011600088260006600204490004200270500001900312520079800331530006101129538007201190538003601262690005401298690007001352700002201422700001901444710004201463830007701505856003801582856002701620w10145NBER20140712071906.0140712s2003 mau||||fs|||| 000 0 eng d1 aRazin, Assaf.10aWhich Countries Export FDI, and How Much?h[electronic resource] /cAssaf Razin, Yona Rubinstein, Efraim Sadka. aCambridge, Mass.bNational Bureau of Economic Researchc2003.1 aNBER working paper seriesvno. w10145 aDecember 2003.3 aThe paper provides a reconciliation of Lucas' paradox, based on fixed setup costs of new investments. With such costs, it does not pay a firm to make a small' investment, even though such an investment is called for by marginal productivity conditions. Using a sample of 45 developed and developing countries we estimate jointly the participation equation (the decision whether to invest at all) and the FDI flow equation (the decision how much to invest). We find that countries which are more likely to serve as source for FDI exports than their characteristics project export lower flow of FDI than is predicted by their characteristics. This negative correlation suggests that the source countries with relatively low setup costs are also those with high marginal productivity of capital. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aF1 - Trade2Journal of Economic Literature class. 7aF3 - International Finance2Journal of Economic Literature class.1 aRubinstein, Yona.1 aSadka, Efraim.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w10145.4 uhttp://www.nber.org/papers/w10145 uurn:doi:10.3386/w10145