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1. Any advance in technology that increases vertical FDI activity in the world will also increase trade flows across countries. 2. Countries will always engage

1. Any advance in technology that increases vertical FDI activity in the world will also increase trade flows across countries. 2. Countries will always engage in horizontal FDI in remote countries to save on shipping costs. 3. The more different countries are in terms of endowments or technology, the more likely it is that firms can reduce the marginal cost of production by engaging in vertical FDI.

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