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Trade Policies and FDI with an Endogenous Market Structure

Trade Policies and FDI with an Endogenous Market Structure AbstractGiven an endogenous market structure, this research investigates the effects of tariff and equivalent quota policies on foreign firms’ FDI decisions. Findings show that foreign firms have symmetric (asymmetric) decisions in terms of FDI versus export under a tariff (quota) policy. Furthermore, FDI is more likely to occur under the tariff than the quota regime, but the former is definitely more (less) desirable than the latter in terms of domestic (world) welfare. Finally, a more cost-efficient firm is more likely to engage in FDI under either the tariff or the quota regime. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The B E Journal of Economic Analysis & Policy de Gruyter

Trade Policies and FDI with an Endogenous Market Structure

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References (23)

Publisher
de Gruyter
Copyright
© 2023 Walter de Gruyter GmbH, Berlin/Boston
ISSN
1935-1682
eISSN
1935-1682
DOI
10.1515/bejeap-2022-0240
Publisher site
See Article on Publisher Site

Abstract

AbstractGiven an endogenous market structure, this research investigates the effects of tariff and equivalent quota policies on foreign firms’ FDI decisions. Findings show that foreign firms have symmetric (asymmetric) decisions in terms of FDI versus export under a tariff (quota) policy. Furthermore, FDI is more likely to occur under the tariff than the quota regime, but the former is definitely more (less) desirable than the latter in terms of domestic (world) welfare. Finally, a more cost-efficient firm is more likely to engage in FDI under either the tariff or the quota regime.

Journal

The B E Journal of Economic Analysis & Policyde Gruyter

Published: Apr 1, 2023

Keywords: endogenous market structure; FDI; tariff; equivalent quota; F12; F13

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