Trade and FDI Liberalization in Multiple Oligopolies

Kenji Fujiwara ()

No 131, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper examines welfare effects of trade and FDI liberalization in a model where several oligopolistic industries compete for a common factor. With this general equilibrium effects, trade and FDI liberalization has a contrasting effect. While it is unclear whether trade liberalization benefits each country, it necessarily raises world welfare. When FDI is liberalized, the host country loses and the source country gains, resulting in no effect on world welfare. These results suggest that simultaneous liberalization of trade and FDI becomes welfare-improving for the world.

Keywords: trade liberalization; FDI liberalization; oligopoly; factor price; general equilibrium (search for similar items in EconPapers)
JEL-codes: F12 F13 F23 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2015-07, Revised 2015-07
New Economics Papers: this item is included in nep-int
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http://192.218.163.163/RePEc/pdf/kgdp131.pdf First version, 2015 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:131

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