FDI in post-production services and product market competition

• 成果类型: Article
• 署名作者: Ishikawa, Jota; Morita, Hodaka; Mukunoki, Hiroshi
• 署名单位: Hitotsubashi University; University of New South Wales Sydney; Gakushuin University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2010.04.004
• 发表日期: 2010
• 页码: 73-84
• 关键词: Post-production services; trade liberalization; FDI; Outsourcing; International oligopoly

摘要

Post-production services, such as sales, distribution, and maintenance, comprise a crucial element of business activity. We explore an international duopoly model in which a foreign firm has the option of outsourcing post-production services to its domestic rival or providing those services by establishing its own facilities through FDI. We demonstrate that trade liberalization in goods may hurt domestic consumers and lower world welfare, and that the negative welfare impacts are turned into positive ones if service FDI is also liberalized. This finding yields important policy implications, given the reality that the progress of liberalization in service sectors is still limited. (C) 2010 Elsevier B.V. All rights reserved.