Fonseca, MiguelMendonça, AntónioPassos, José2022-03-282022-03-282010-03Fonseca, Miguel. António Mendonça and José Passos .2010. Home country trade effects of outward FDI : an analysis of the Portuguese case, 1996-2007. Faculdade de Economia. Universidade do Porto – Working Papers nº 365/ 2010.http://hdl.handle.net/10400.5/23936Given 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 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. Our main conclusion is that the empirical evidence for Portugal is consistent with a substitution hypothesis between direct investment abroad and trade, and consequently we detect a negative trade balance effect with the majority of countries in our sample, excepting Angola and, in a lesser extension, Spain.engForeign Direct InvestmentTradeGravity ModelPortugalworking paper