Strategic Policy Towards Multinationals for Oligopolistic Industries

Edwin Lai ()

Review of International Economics, 2002, vol. 10, issue 1, 200-214

Abstract: The author considers an environment with two firms, one domestically owned and one a foreign‐owned multinational corporation (MNC), both producing in the host (domestic) country. It is found that there are three distinct dimensions that affect a country’s strategic policy towards domestically‐owned firms and foreign‐owned firms: the number of policy instruments available to the host government (whether or not it can tax/subsidize both types of firms), the location of the market (in the host country or a third country), and the extent of spillover of the foreign‐owned firms’ production.

Date: 2002
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