Miguel Fonseca, MsC1, António Mendonça, PhD2, and José Passos, PhD2. (1) Economics, University of Porto, Rua Dr. Roberto Frias, Porto, 4200-464, Portugal, (2) Economics, School of Economics and Management-Technical University of Lisbon, Rua do Quelhas, 6, Lisbon, 1200-781, Portugal
Given the increased internationalisation of the Portuguese economy through outward Foreign Direct Investment (FDI), particularly on the Portuguese-speaking countries, our main objective is to discuss the empirical relationship between this outward FDI and trade. We use fixed-effects panel data analysis within a framework of gravity equations for exports and imports, with a sample composed by EU-15, U.S.A., Brazil, Angola, Japan and China, for the period 1996-2007. We expect to conclude about the complementary or substitution hypothesis and the significance of the effect over the Portuguese trade balance.