Trade and FDI liberalization in a general oligopolistic equilibrium

Kenji Fujiwara ()

No 150, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: Incorporating recent evidence that FDI _rms are more e_cient than exporters into a general oligopolistic equilibrium model, this paper examines the welfare e_ects of trade and FDI liberalization. We _nd that trade liberalization alone is bene_cial if the di_erence in marginal cost between the exporting and FDI industries is small enough while FDI liberalization unambiguously improves welfare. Combining these results, we further show that simultaneous liberalization of trade and FDI necessarily turns out welfare-improving.

Keywords: Trade liberalization; FDI liberalization; General oligopolistic equilibrium; Welfare (search for similar items in EconPapers)
JEL-codes: F12 F13 F23 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2016-11, Revised 2016-11
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:150

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