Trading Blocs and Foreign Direct Investment: Endogenous Coalition Structure

Hyejoon Im

No 532, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: I examine the relationship between trading blocs and Foreign Direct Investment (FDI). Firms in the model serve foreign markets either by exporting or by setting up plants abroad, which is FDI. I find that countries forming a bloc could attract FDI from non-member countries. However, I show by using a coalition formation game that this FDI-attracting bloc cannot be an equilibrium outcome when multilateralism (i.e., the free trade world) is an option for countries. This result is mainly related to the adverse welfare effects of the tariff-jumping FDI

Keywords: trading blocs; multinational corporations; FDI; coalition formation game (search for similar items in EconPapers)
JEL-codes: F15 F23 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repec.org/esFEAM04/up.12187.1079311238.pdf (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: https://EconPapers.repec.org/RePEc:ecm:feam04:532

Access Statistics for this paper

More papers in Econometric Society 2004 Far Eastern Meetings from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().