Commercial policy under cross-border ownership

Jota Ishikawa and Yoichi Sugita

No 663, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: It is often observed that in order to serve the domestic market, foreign firms not only export but also control domestic firms through foreign direct investment (FDI). This paper examines the effects of tariffs, production subsidies, and foreign ownership regulation on prices, outputs, profits, and welfare when both exports and FDI coexist. Cross-border ownership on the basis of both financial interests and corporate control leads to horizontal market-linkages through which tariffs and production subsidies may not benefit local firms. The effects of ownership regulation depends on both the initial ownership share and the substitutability between goods

Keywords: foreign direct investment; corporate control; tariffs; production subsidies; ownership regulation (search for similar items in EconPapers)
JEL-codes: F12 F13 F23 (search for similar items in EconPapers)
Date: 2004-08-11
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ecm:feam04:663

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