EconPapers    
Economics at your fingertips  
 

EXPORTS VERSUS FDI IN SMITH-MOTTA FRAMEWORK

Andrzej Cieślik ()

Equilibrium. Quarterly Journal of Economics and Economic Policy, 2016, vol. 11, issue 2, 189-218

Abstract: In this paper we study the choice between exporting and foreign direct investment (FDI) in the Smith-Motta duopoly framework. First, we identify the conditions necessary for exporting and FDI, depending on the costs of exporting and the cost of foreign investment. Then, we discuss various proximity-concentration tradeoffs. Finally, we demonstrate that six possible types of equilibriums may emerge depending on various combinations of the key parameters of the model. These equilibriums include: a monopoly FDI equilibrium, a monopoly exporting equilibrium, a domestic monopoly equilibrium, a duopoly FDI equilibrium, a duopoly exporting equilibrium, and no entry equilibrium.

Keywords: exporting; foreign direct investment; proximity-concentration tradeoff (search for similar items in EconPapers)
JEL-codes: F23 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.12775/EQUIL.2016.009 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:pes:ierequ:v:11:y:2016:i:2:p:189-218

Access Statistics for this article

Equilibrium. Quarterly Journal of Economics and Economic Policy is currently edited by Adam P. Balcerzak

More articles in Equilibrium. Quarterly Journal of Economics and Economic Policy from Institute of Economic Research Contact information at EDIRC.
Series data maintained by Adam P. Balcerzak ().

 
Page updated 2017-06-10
Handle: RePEc:pes:ierequ:v:11:y:2016:i:2:p:189-218