EconPapers    
Economics at your fingertips  
 

Foreign Entry and Domestic Welfare: Can "Market Discipline" Be Excessive?

Aditya Bhattacharjea ()

No 83, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: This paper examines the effects of foreign entry, in the form of either imports or direct foreign investment, into an oligopolistic market. It shows that foreign entry can reduce welfare relative to autarky unless at least some domestic firms exit, or unless the foreign firms capture a very large share of the home market. However, it also shows that an optimal tariff can prevent this welfare decline. The paper concludes with some suggestive empirical evidence, and implications are drawn for trade and investment liberalization, as well as for domestic and international competition policy.

Keywords: Entry; foreign investment; tariff; oligopoly; strategic trade policy. (search for similar items in EconPapers)
JEL-codes: F13 O19 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2000-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.cdedse.org/pdf/work83.pdf
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

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: https://EconPapers.repec.org/RePEc:cde:cdewps:83

Ordering information: This working paper can be ordered from
http://www.cdedse.org/

The price is free.

Access Statistics for this paper

More papers in Working papers from Centre for Development Economics, Delhi School of Economics Delhi 110 007. Contact information at EDIRC.
Bibliographic data for series maintained by Sanjeev Sharma ().

 
Page updated 2020-09-14
Handle: RePEc:cde:cdewps:83