FDI in Retail: A Theoretical Analysis

Debasmita Basu and Abhirup Sarkar

Studies in Microeconomics, 2018, vol. 6, issue 1-2, 14-23

Abstract: In this article, we build a theoretical model of retail and wholesale trade to analyse the effects of the entry of multinationals in wholesale and retail markets on the size of the domestic retail sector and prices. We show that the domestic retailing sector will expand, the retail price will fall and the wholesale price will go up, if and only if the retailing cost of the MNCs is greater than the retailing cost of the domestic retailers. JEL Classifications: F13, F61, F63

Keywords: FDI; Trade policy; retail sector; agriculture (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:sae:miceco:v:6:y:2018:i:1-2:p:14-23

DOI: 10.1177/2321022218771763

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