Trade and FDI liberalization in a general oligopolistic equilibrium

Kenji Fujiwara

Japan and the World Economy, 2017, vol. 41, issue C, 45-49

Abstract: Incorporating recent evidence that FDI firms are more efficient than exporters into a general oligopolistic equilibrium model, this paper examines the welfare effects of trade and FDI liberalization. We find that trade liberalization alone is beneficial if the difference in marginal cost between the exporting and FDI industries is small enough while FDI liberalization unambiguously improves welfare. Combining these results, we further show that simultaneous liberalization of trade and FDI necessarily turns out welfare-improving.

Keywords: Trade liberalization; FDI liberalization; General oligopolistic equilibrium; Welfare (search for similar items in EconPapers)
JEL-codes: F12 F13 F23 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:41:y:2017:i:c:p:45-49

DOI: 10.1016/j.japwor.2016.12.003

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