By making use of a gravity model, this paper examines the impact of FDI on exports and imports of Mongolia. The empirical analysis presented in this paper is based on a recently released panel dataset involving Mongolia’s 7 major trading partners for the period 1995–2009. Data were firstly collected from reliable and official organization and websites. From the studying result, it indicates that trade flows were influenced by five variables, such as FDI, GDP and distance. Especially, this research shows that there is positive relationship between FDI and Mongolian international trade. Also this studying result proves Gravity model on Mongolian import flows.

Africano, A. P., & Magalhaes, M. (2005). FDI and Trade in Portugal. Faculdade de Economia,Universidade do Porto, Working Paper No 174
Anderson, J. (1979). Theoritical foundation for the gravity equation. American Economic Review, 69(1), 106-116.
Bagabandi (2002). Foreign Investment Law of Mongolia. The State Ih Hural of Mongolia www.investmongolia.com/law14_2.pdf
Belderos, R., & Sleuwaegen, L. (1998). Tariff jumping DFI and export substitution: Japanese electronics firms in Europe. International Journal of Industrial Organization 16, 601-638.
Bergstrand, J. H. (1985). The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence
Review of Economics and Statistics, 67(3), 474-481.
Blomstrom, M., Lipsey, R., & Kulchycky, K. (1988). US and Swedish direct investment and exports. In: Trade policy issues and empirical analysis. University of Chicago Press, Chicago, 259-297.
Brainard, L. (1993). An empirical assessment of the factor proportions explanation of multinational sales. NBER Working Paper, No 4583.
Brainard, L. (1997). An empirical assessment of the proximity-concentration trade-off between multinational sales and trade. American Economic Review, 87(4), 520-544.
Brenton, P., Mauro, F. D., & Lucke, M. ( 1999). Economic integration and FDI: An empirical analysis of foreign investment in the EU and in Central and Eastern Europe. Empirica, 26(2), 95-121.
Carr, D., Markusen, J., & Maskus, K. (2001). Estimating the knowledge-capital model of the multinational enterprise. American Economic Review, 91(3), 693-708.
Castilho, M., & Zignago, S. (2002). Foreign direct investment, trade and regional integration in Mercosur.
Center, T. E. (2007). Mongolia: Economic Overview. www.eurasiacenter.org/Country reports/ MONGOLIAreport.doc.
Clausing, K. (2000). Does multinational activity displace trade? Economic Inquiry, 38(2), 190-205.
Crespo, N., & Fontoura, M. P. (2007). Determinant Factors of FDI Spillovers- What do We Really Know? World Development, 35(3), 410-425.
Dunning, J., Kim, C.-S., & Lin, J.-D. (2001). Incorporating trade into the investment development path: A case study of Korea and Taiwan Oxford Development Studies, 29(2), 146-154.
Eaton, J., & Tamura, A. (1994). Bilateralism and regionalism in Japanese and US:Trade and direct foreign investment patterns. Journal of Japanese and International Economies, 8, 478-510.
FIFTA (2009). FDI Review 2009, from //htp:www.investmongolia.com
Head, K., & Ries, J. (2001). Overseas investment and firm exports. International Economics Review of International Economics, 9(1), 108-122.
Kojima, K. (1973). Macro economic approach to foreign direct investment. Hitosubachi Journal of Economics, 14, 1-24.
Kojima, K. (1985). Japanese and american direct investment in Asia: A comparative analysis. Hitosubachi Journal of Economics, 26, 1-35.
Linneman, H. (1966). An Econometric study of international trade flows. Amsterdam: North-Holland.
Lipsey, R. (1999). Affiliates of U.S. and Japanese multinationals in East Asian production and trade. NBER Working Paper, 7292.
Lipsey, R., & Weiss, M. Y. (1984). Foreign production and exports of individual firms. Review of Economics and Statistics, 66 (2), 304-308.
Markusen, J. (1997). Trade versus investment liberalization. NBER Working Paper 6231.
Markusen, J. (2000). Foreign direct investment and trade. CIES-Policy Discussion Paper 0019, University of Adelaide, Australia.
Markusen, J., & Maskus, K. (2002). General-equilibrium approaches to the multinational firm: A review of theory and evidence NBER Working Paper 8334.
McCallum, J. (1995). Natioanal borders matter: Canada-US regional trade patterns. The American Economic Review, 85(3), 615-622.
Mottaleb, K. A. (2007). Determinants of Foreign Direct Investment and Its Impact on Economic Growth in Developing Countries. Civil Service College, Dhaka, 63 New Eskaton, BIAM MPRA Paper No. 9457, 3-4.
Nachin, D. (2007). Country note on Trade an Investment Policy Coordination Country: Mongolia.
For ARTNeT Consultative Meeting on Trade and Investment Policy Coordination
Bangkok, Thailand 1.
38
NSO (1995-2009). Monthly Bulletin of Statistics. Ulaanbaatar.
NSO (2005-2009). Monthly Bulletin of Statistics. Ulaanbaatar.
NSO (2009). Statistical Bulletin of Mongolia Ulaanbaatar: National Statistical Office of Mongolia.
NSO (December, 2009). Monthly Bulletin of Statistics. Ulaanbaatar.
Pfaffermayr, M. (1996). Foreign outward direct investment and exports in Austrian manufacturing: Substitutes or complements? Welwirtschaftliches 132(3), 501-522.
Pianetta, E. (2006). Evaluation of Free Trade Agreement between Panama and Taiwan. Feng Chia Univesity, Taichung.
Plummer, M. G. (2006). ASEAN-EU econometric relationship: Integration and lessons for the ASEAN economic community. Journal of Asian economics, 17(3), 442-447.
Romer, P. (1993). Idea Gaps and Object Gaps in Economic Development. Journalof Monetary Economics, 32(3).
Rugman, A. (1990). Multinationals and Canada-United States free trade. University of South Carolina, Columbia.
Svensson, R. (1996). Effects of overseas production on home country exports: Evidence based on Swedish multinationals Weltwirtscaftliches Archiv 132(2), 304-329.
Tinberg, J. (1962). Shaping the world economy: Suggestions for an international economic policy. TheTwentieth Century Fund.
UNCTAD (2009). FDI/TNC database.
USAID (2004). Segir Mongolian privatization programm, Contract No PCE-I-00097-00037-00 Delivery Order 800. Ulaanbaatar Mongolia.