Abstract
This paper explores the asymmetric impact of factor endowment changes on for- eign investment source and host countries using a Ricardo-Wilson (multi-factor, continuum- of-goods) model where there is a technological basis for trade even if the countries are equivalent in all respects except for capital endowments. It is discovered that host-country capital growth must be immiserizing in the source country provided that the two countries are initially alike in all respects except for capital endowments. While a stringent single- good MacDougall-Kemp restriction suffices to guarantee that source-country labour growth is immiserizing in the host country, initial equivalence between countries is insufficient.
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