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1.
The purpose of this paper is two-fold. First, it develops a theoretical model of international joint ventures to suggest a new approach to the determination of profit allocation between the partners in the joint venture. Second, we examine the issue of tax competition between two countries for an international joint venture. We find that even in the absence of any bargaining power for the domestic firms, the foreign firm would like to give up more than half of profits to its partner. Furthermore, the foreign firm would like to locate in a country in which the partner firm is more efficient. We also find, with numerical simulations, that the domestic firm will accept the joint venture if the foreign firm's technology is significantly more superior than its own. 相似文献
2.
This paper analyzes the situation in which a national government introduces environmental regulations. Within the framework of an international duopoly with environmental regulations, an environmental tax imposed by the government in the home country can induce a foreign firm with advanced abatement technology to license it to a domestic firm without this technology. Furthermore, when the domestic firm's production technology is less efficient than that of the foreign firm, the foreign firm may freely reveal its technology to the domestic firm. These improvements through the voluntary transfer of technology imply that environmental regulations have positive impacts on innovation. 相似文献
3.
This paper examines the foreign direct investment (FDI) versus exports decision of foreign oligopolistic firms under cost heterogeneity. An additional motivation for firms to invest abroad is the technological sourcing via spillovers, which flow from the host more efficient firm to foreign less advantaged firms. For intermediate values of the set‐up costs associated with FDI entry, it is shown that foreign firms choose opposite entry strategies. An equilibrium where the less efficient foreign firm exports whereas the more efficient invests is more likely to happen when foreign firms become more heterogeneous, the larger the trade costs and not too big oligopolistic profitability. Interestingly, the opposite may also be an equilibrium thus finding that the more efficient firm does not choose to invest, a result that emphasizes the relevance of the strategic setting under consideration. The latter result identifies a market failure since welfare in the host market is higher when both firms undertake FDI; a finding that calls attention to how appropriate are host government policies towards internationalization strategies. 相似文献
4.
In this paper, a domestic and a foreign firm compete as Cournot duopolists in the domestic market. The foreign firm has incomplete information about the costs of the domestic firm, but the domestic government and the domestic firm are completely informed. It is shown that the domestic government can use its tariff to signal about the costs of the domestic firm. In the separating equilibrium, the domestic government signals the uncompetitiveness of the domestic firm by setting a lower tariff than is optimal under complete information. 相似文献
5.
The literature on quid pro quo foreign direct investment describes how unwarranted investment may be undertaken because of the endogeneity of trade policy. The quid pro quo is that foreign producers, who are exporters to the host economy, invest in return for a liberal trade policy. We describe converse circumstances. The nexus between foreign investment and endogeneity of trade policy is implicit (not explicit as in quid pro quo investment), and a government with socially correct objectives (perhaps imposed by international-agency conditionality) wishes (i) to privatize a domestic firm by sale to a foreign investor who can provide technology improvement for domestic production and (ii) to pursue a liberal trade policy. The government is electorally constrained by needs of political popularity. The outcome is that efficient private investments may not be undertaken—in contrast with the quid pro quo case where in efficient investments are undertaken. While our model is general, the conditions we describe appear to be in particular present in post-socialist economies. Our model offers a contributing explanation for the slow pace of progress in many such economies, which rely on foreign technological transfer to improve the technology and product quality of post-socialist industry, but fail to receive the requisite foreign investment despite governments' good intentions. 相似文献
6.
Mads Greaker 《Environmental and Resource Economics》2006,33(1):1-37
Eco-labels are suspected to serve protectionist purposes. We analyze the choice between an environmental standard and a voluntary
eco-label scheme in a partial trade model with one domestic firm and one foreign firm. The environmental standard will only
apply to the domestic firm, while both firms can adopt the eco-label. Pollution is production related, and domestic consumers
demand products that are produced in an “environmentally friendly” way. Our results show that it may be optimal for the domestic
government to introduce an eco-label and get both firms to adopt the label, instead of setting an environmental standard.
However, to what extent this policy serves protectionist purposes is ambiguous. In particular, if the willingness to pay for
green products is sufficient to cover the pollution abatement costs of the foreign firm, foreign firm profit will increase
while domestic firm profit will decrease compared to the outcome with a domestic environmental standard. On the other hand,
if the willingness to pay for green products is insufficient, the foreign firm would be better off with a domestic environmental
standard. 相似文献
7.
Ozgur M. Kayalica Rafael S. Espinosa-Ramirez 《International Review of Economics & Finance》2009,18(1):63-69
We examine the effects of mergers on Foreign Direct Investment (FDI), and on shaping national policies regarding FDI. In this work we develop a partial equilibrium model of an oligopolistic industry in which a number of domestic and foreign firms compete in the market for a homogeneous good in a host country. It is assumed that the number of foreign firms is endogenous and can be affected by the government policy in the host country. The government sets the policy (subsidies) to maximise social welfare. We allow domestic mergers. Our main results suggest that when the host country government imposes discriminatory lump-sum subsidy in favor of foreign firms, a merger of domestic firms will increase the number of FDI if the subsidy level is exogenous. With an endogenous level of subsidy, a merger of domestic firms will decrease (increase) the welfare if the domestic firms are more (less) efficient. 相似文献
8.
Tariff Policy and the Foreign Entry Decision in the Presence of a Cost-Based Informational Asymmetry
The paper demonstrates that the standard prediction on the relation between tariff rates and the mode of foreign entry—exports or direct investment—may not hold in the presence of incomplete information. A foreign firm lacks full information on the cost structure of an informed incumbent firm located in the domestic (potential) host country. Within a two‐period model, the local incumbent may behave in a manner which keeps the potential foreign entrant uninformed of its cost structure. In such a pooling equilibrium, the uninformed foreign firm either refrains from entering altogether or serves the host country via exports at tariff rates which would, otherwise under complete information, induce entry via direct investment. When entry mode is altered, other standard full‐information effects of trade policy may also no longer hold. 相似文献
9.
Arijit Mukherjee 《Journal of Economic Policy Reform》2013,16(1):75-89
This paper develops a model of foreign entry strategy and examines welfare of the host-country under two situations - (i) where host-country government commits to the tax policy, (ii) where host-country government does not commit to the tax policy. It turns out that under the non-committed government policy the foreign firm does not prefer to hold equity share in the domestic project. The host-country welfare, however, is more under the committed government policy than the non-committed government policy when the foreign firm has sufficiently higher bargaining power. The possibility of technology choice by the foreign firm reduces the range of bargaining power of the foreign firm over which the host-country welfare is more under the committed policy compared to the non-committed policy. 相似文献
10.
Sugata Marjit Yew Kwang Ng Udo Broll & Bhaswar Moitra 《Review of International Economics》1999,7(4):625-631
We develop a simple model of direct foreign investment where the host country government cannot credibly signal its honest intention such as to stick to the contracted tax rate. The foreign firm has some prior belief regarding the ex post discretionary policies of the local government. Since the investment is completely irreversible, such a belief pattern might not induce the firm to invest in a country which badly needs it. It is shown that the host government can design a subsidy scheme which might attract foreign investment by removing the credibility problem. 相似文献
11.
文章在累积创新框架下建立一个附加拍卖的动态博弈模型,研究东道国企业利用外商技术转移实现技术升级的微观机制,以及东道国政府旨在改善社会福利的引资政策。研究后发现:对于核心技术,外商总有激励进行技术封锁;对于一般技术,外商愿意将其技术许可给东道国以赚取垄断利润;东道国企业只有坚持自主创新才能获得技术模仿的机会并最终突破外商对核心技术的封锁;若东道国政府能使外商将核心技术授权给本国企业,本国企业将绕过自主创新从而直接进行模仿创新,若不能有效控制外商技术转移方式但可对仅转移设备等"硬"核心技术的方式采取有效限制,可降低潜在技术模仿成本从而减少东道国激励本国厂商进行创新的补贴成本。最后,文章讨论了我国利用外资推动技术升级的方式。 相似文献
12.
The paper models the multinational choice between foreign direct investment in and exporting to a domestic market as an equilibrium outcome of strategic play between domestic and foreign firms. Two cases are considered, one in which the domestic firm can precommit to output levels (as, for example, through investment in a distribution network), and one in which such precommitment is not possible. The domestic firm's strategy in the case of precommitment includes aggressive efforts to deter or divert foreign investment and results in fewer observed equilibria with foreign investment than would otherwise occur. Tariffs designed to switch the foreign decision from exporting to direct investment may lead instead to monopolization of the market by the domestic firm. 相似文献
13.
This paper models an international contest for government procurement as a dynamic game between a domestic firm and a foreign firm. We show that trade liberalization, in the form of a reduction in bias against the foreign firm, improves both domestic and global welfare if (i) either the foreign firm's profit is sufficiently large or (ii) the initial degree of home bias is sufficiently small. If the initial home bias is large, a small reduction in the bias may reduce welfare. 相似文献
14.
Takao Asano 《Journal of Macroeconomics》2010,32(1):185-200
We analyze the optimal timing of an irreversible foreign direct investment by a foreign firm and the optimal tax policy by a host country under ambiguity. We derive the optimal GDP level at which the foreign firm switches from exporting to a foreign direct investment. Furthermore, we derive the optimal tax policy by the host country, and analyze the effect of an increase in ambiguity on the optimal tax policy. We show that the host country should reduce the optimal corporate tax rate from the host government’s perspective in response to an increase in ambiguity. Our result is different from the one obtained by Pennings (2005) that shows that an increase in risk induces an increase in the optimal corporate tax rate. 相似文献
15.
Leonard F. S. Wang Arijit Mukherjee Chenhang Zeng 《Journal of Public Economic Theory》2020,22(5):1462-1480
In mixed oligopolies, technology licensing from a cost‐efficient firm to a cost‐inefficient firm has been widely observed. This paper examines the relationship between privatization and licensing (by public or private firms) with the consideration of either a domestic or a foreign private firm. We find that (a) in the case of a domestic private firm, public licensing facilitates privatization, but private licensing hinders privatization; (b) in the case of a foreign private firm, both public and private licensing facilitate privatization. Our results yield important policy implications on privatization. 相似文献
16.
Foreign direct investment and host country policies: A rationale for using ownership restrictions 总被引:1,自引:0,他引:1
Bilgehan Karabay 《Journal of development economics》2010,93(2):218-225
This paper examines host governments' motivation for restricting ownership shares of multinational firms (MNFs) in foreign direct investment (FDI) projects. An MNF with a productivity advantage is willing to invest in a host country. The host government wants to capture the MNF's surplus yet cannot observe it due to the MNF's private information about its firm-specific advantage. In contrast, a joint venture (JV) partner might observe this surplus depending on its ownership share. The host government can alleviate its informational constraints by using ownership restrictions to force a JV. This calls into question the wisdom of calls for ‘liberalizing’ FDI flows by the wholesale elimination of domestic JV requirements. We show that the optimal mechanism involves ownership restrictions that decrease as the size of the MNF's firm-specific advantage increases. 相似文献
17.
We investigate tax/subsidy competition for foreign direct investments (FDI) between countries of different size when a domestic firm is the incumbent in the largest market and we study how the nature (public or private) of the incumbent firm affects policy competition. We show that, differently from the case of a private firm, the country hosting the incumbent always benefits from FDI if the domestic firm is a public welfare‐maximizing firm. We also show that the public firm acts as a disciplinary device for the foreign multinational that will always choose the efficient welfare‐maximizing location. An efficiency‐enhancing role of policy competition may then arise only when the domestic incumbent is a private firm, whereas tax competition is always wasteful in the presence of a public firm. 相似文献
18.
Kamal Saggi 《Review of International Economics》1999,7(4):699-714
In a two-period duopoly model, this paper considers a foreign firm's choice between licensing and FDI and studies the relative impact of these modes of technology transfer on the incentives for innovation of that firm and its domestic rival. Relative to licensing, FDI limits technology spillovers to the domestic firm but dissipates more rents in the product market. Internalization allows the foreign firm to build on an existing technological advantage. While the local firm develops its best technology if initial licensing is followed by FDI, the foreign firm transfers the most efficient technology under FDI in both periods. 相似文献
19.
In the presence of international joint ventures, effects of policies like foreign equity cap, trade protection and domestic resource requirement restriction towards equity sharing and welfare are analysed. Foreign equity cap reduces host country's welfare. Trade protection lowers equity share for the local firm. It has a first-order source of welfare gain as the internal efficiency of the firm improves. Also, there is a first-order loss resulting from a leakage effect, since a part of the surplus goes to a foreign firm. A marginal domestic resource requirement restriction enhances the joint surplus of the venture and social welfare. 相似文献
20.
Using a product differentiation model, this paper discusses the issue of transnational firms evading tariffs and investing directly in a host country (through foreign direct investment (FDI)). Where product quality is differentiated between foreign and host country firms and assuming a firm's quality requirement is a long‐term strategy and is not affected by a foreign firm's trade decision, we obtain the following findings. First, whether or not a host country firm produces high or low quality products, raising the quality requirement for foreign products will increase the possibility of a foreign firm choosing FDI instead of exporting a product to the host country. Second, raising the quality requirement for domestic products will lower the possibility of foreign firms choosing FDI without regard to the product's quality. Finally, given a competitor in the host country, in FDI, a foreign high‐quality product‐producing firm has an advantage over a low‐quality product‐producing firm. We also find that even when firms' quality decisions are affected by a foreign firm's trade decision, most of the above results will still hold. 相似文献