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Blekinge Institute of Technology
School of Management, BTH

Outward FDI and Trade Performance: An Indication from Sweden Perspective Master Thesis in Business Administration

Spring Term April 13th 2007

Supervisor: Anders Hederstierna Proponent: Mohammad T. Hasan School of Management, BTH

Outward FDI and Trade Performance: An Indication from Sweden Perspective

Abstract:

In the global world FDI is the most prominent economic development factor for the growth of home and host countries GDP. FDI and Trade performances are positively engage in the complementarity or substitutability relationship depending on the country factors advantages and microeconomic and macroeconomic scale of economies in firm and industrial level. The main objective of this paper is to expose how outward FDI influence home country’s export performance. Previously there have been conducted a lot of empirical studies on country’s trade (export) performance and FDI flows. This project carries out to analyses aggregate regional level data and be tested by OLS and two stage-least-square (2SLS) time series regression analyses. The empirical analysis founds, outward FDI and exports are statistically positively significant in firm and industry level.

Keywords: FDI, export, aggregate regional level.

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Outward FDI and Trade Performance: An Indication from Sweden Perspective

ACKNOWLEDGMENTS

I would like to offer my deep appreciation to my supervisor Anders Hederstierna to patiently review my thesis and other faculty members who have helped me to shape this paper and contributes economic ideas in different angel.

I specially am thanking to BTH library for being extremely kind and patient in supplying me with materials and extensive cooperation that were critical for conducting my investigations, and I also thank to UNCTAD, Riksbanken, Statistics Sweden, International Monetary Fund online resources and other sources who have helped me to find and process all this statistics data.

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Outward FDI and Trade Performance: An Indication from Sweden Perspective

Thesis Summary Title:

Outward FDI and Trade Performance: An Indication from Sweden

Perspective. Author: Mohammad Tuhinur Hasan Supervisor: Anders Hederstierna Department: School of Management, Blekinge Institute of Technology Course: Master thesis in business administration, 10 credits. Background and Problem Discussion: FDI and Trade are playing an important role for development of country’s economy in different prospect. The effect of globalisation integrated economies facilitating cross-border trade and capital movement flows independently and creating a common huge market to serve customers geographically. Swedish outward FDI and export has positive impact on the Swedish economy. To look through the problem in this paper is that how Swedish outward FDI and exports are comprehensively performing into different regional level in the world using aggregate regional level data analyses. Purpose: The main objective of this paper is to expose how outward FDI influence Swedish export performance. Method: Quantitative research, using regional level aggregated data collected from UNCTAD, WorldBank, Riksbanken, Statistics Sweden and IMF to perform statistical analysis. Theory: in the theory and literature section, the author reviews FDI and trade trends, different theories of international economies and trade, theoretical and 1

Outward FDI and Trade Performance: An Indication from Sweden Perspective

empirical studies by different researchers to support the primary aim of this paper. Analysis: The author have used three models on the base of the gravity model analysis using ordinary least square OLS regression and two stage-least-square 2SLS regression to examine how outward FDI influence the trade-export

performance abroad at regional level. Conclusion: The performance of Swedish export positively associated with the outward foreign direct investment....
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