Relating to the econometric model in the paper, Zhao Chen doubted whether GDP of the destination country (country j) would be a valid instrumental variable: GDP is an indicator of market demand, which impacts on the performance of a firm in that country. He also pointed to the importance of paying attention to possible switching of firm's operations from one destination country to another in the model specification. Ding Lu suggested considering differences in corporate taxation and membership of bilateral and regional trading agreements of host countries as additional explanatory variables. Fredrik Sjöholm argued that the FDI variable used in the model may not fully capture the supplier–assembler relationship given the sizeable presence of arms-length procurement within production networks. This would be particularly the case when final assemblers become deep-rooted in a given host country, setting the stage for forging supplier relations with local vendors.
Prema-chandra Athukorala alluded to...