Trade openness. Recent studies have rejected the older argument that “tariff
jumping” is an important explanator of FDI, that trade and FDI are substitutes.
Rather, at this point it appears that FDI and trade are complimentary to one
another (Markusen, 1997). That being the case, a country’s openness to trade 12
should be an indicator of policy makers’ perceptions that additional FDI would be
beneficial, that linkages to the world economy have a positive effect on growth
and development