FDI in Post-Production Services and Product Market Competition

Jota Ishikawa, Hodaka Morita () and Hiroshi Mukunoki

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: Post-production services, such as sales, distribution, and maintenance, comprise a crucial element of business activity. We explore an international duopoly model in which a foreign firm has the option of outsourcing post-production services to its domestic rival or providing those services by establishing its own facilities through FDI. We demonstrate that trade liberalization in goods may hurt domestic consumers and lower world welfare, and that the negative welfare impacts are turned into positive ones if service FDI is also liberalized. This finding yields important policy implications, given the reality that the progress of liberalization in service sectors is still limited.

Keywords: post-production services; trade liberalization; FDI; outsourcing; international oligopoly (search for similar items in EconPapers)
Date: 2010-04
New Economics Papers: this item is included in nep-com and nep-int
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: FDI in post-production services and product market competition (2010)
Working Paper: FDI in Post-Production Services and Product Market Competition (2010)
Working Paper: FDI in Post-Production Services and Product Market Competition (2008)
Working Paper: FDI in Post-Production Services and Product Market Competition (2008)
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