FDI may help rival firms

Junichiro Ishida and Noriaki Matsushima

Economics Bulletin, 2005, vol. 6, issue 22, pages 1-8

Abstract: This paper presents a two-country model of duopolistic market with vertical relations which leads to a paradoxical result: when upstream firms possess sufficient bargaining power, cost-reducing FDI may actually enhance the rival firm's profit.

Keywords: Cournot competition; foreign direct investment; transport cost; vertical relation (search for similar items in EconPapers)
JEL-codes: F2 J5 (search for similar items in EconPapers)
Date: 2005-11-15
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