Endogenous market structures and the gains from foreign direct investment

• 成果类型: Article
• 署名作者: De Santis, RA; Stähler, F
• 署名单位: University of Kiel; European Central Bank
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2003.08.008
• 发表日期: 2004
• 页码: 545-565
• 关键词: foreign direct investment; multinational firms; imperfect competition; welfare

摘要

This paper discusses the gains from liberalizing foreign direct investment (FDI) in a two-country setting with endogenous market structure. We investigate two different scenarios. In the first scenario, headquarters costs are large in the foreign country so that the industry is located in the domestic country only. In this case, multinational and national firms may coexist and market concentration may make FDI welfare improving for the foreign country and welfare reducing for the domestic country. In the second scenario, headquarters costs are symmetric and firms will be located in both countries. Here, profitable FDI activities lead to mutual welfare gains, irrespective of market structure effects. (C) 2003 Elsevier B.V. All rights reserved.