Revaluing the capital stock of international production

Christian Bellak; John A. Cantwell

doi:10.1016/j.ibusrev.2003.07.003

Revaluing the capital stock of international production

Publication: Scientific journal › Journal article › peer-review

Abstract

The objective of the paper is to report on the effect of revaluing foreign direct investment (FDI) at replacement values as a means of estimating the importance of international production. A perpetual inventory model is used to revalue FDI stocks to constant and current values. The empirical results show the extent of the revaluation of inward and outward FDI stocks of the US, the UK, Germany, and Japan. Meaningful comparisons across countries require the translation of FDI stocks in a common currency and at constant prices and exchange rates. Such comparisons reveal that compared to other macroeconomic indicators, FDI has been undervalued.

Original language	English
Pages (from-to)	1 - 18
Number of pages	18
Journal	International Business Review
Volume	13
Issue number	1
DOIs	https://doi.org/10.1016/j.ibusrev.2003.07.003
Publication status	Published - 2004

Keywords

International production
Multinational enterprises
Capital stock
Perpetual inventory model
Country study

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title = "Revaluing the capital stock of international production",

abstract = "The objective of the paper is to report on the effect of revaluing foreign direct investment (FDI) at replacement values as a means of estimating the importance of international production. A perpetual inventory model is used to revalue FDI stocks to constant and current values. The empirical results show the extent of the revaluation of inward and outward FDI stocks of the US, the UK, Germany, and Japan. Meaningful comparisons across countries require the translation of FDI stocks in a common currency and at constant prices and exchange rates. Such comparisons reveal that compared to other macroeconomic indicators, FDI has been undervalued.",

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KW - Perpetual inventory model

KW - Country study

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