What is the connection, if any, between comparative advantage (CA) and foreign direct investment (FDI)? Nothing. CA has nothing to do with FDI. Countries often engage in FDI in industries where the country they invest in has a comparative disadvantage. Countries often engage in FDI in industries where the country they invest in has a comparative advantage. When a country's firms invest abroad, this helps to create CA in the same industry at home.
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