3D printing, international trade, and FDI

We analyze the relationship between 3D printing, the volume of trade and the structure of foreign direct investment (FDI). A novel framework with rm-speci c heterogeneity and 3D printing generates three predictions. First, 3D printers are introduced in areas with high economic activity that face high transport costs. Second, technological progress in 3D printing leads to FDI dependent on traditional techniques gradually being replaced with FDI based on 3D printing techniques. Third, with wider adoption, further technological progress in 3D printing leads to a gradual replacement of international trade. Empirical evidence looking at the sectors with the highest rates of adoption supports the rst hypothesis, while anecdotal evidence supports the second and third. Our results suggest that the traditional strategy of poor countries for export-led industrialization is threatened by the widespread adoption of 3D printing that replaces trade