Attitudes towards foreign products and welfare with capital mobility

Jean-Marc Callois and Carl Gaigne

No 09-06, Working Papers SMART from INRAE UMR SMART

Abstract: We develop a model of trade with imperfect competition to study the welfare implications in developing and developed countries of the asymmetry in attitudes towards foreign products. In the developed country, consumers benefit from a better perception of foreign products while the rental rate of capital declines as long as the location of capital remains unchanged. However, when capital is mobile, the developing country hosts more and more capital at the expense of the developed country as perception of varieties produced in the developed country improves and the surplus of consumers in the developed country can decrease.

Keywords: product of origin; capital location; consumer’s surplus (search for similar items in EconPapers)
JEL-codes: F12 F21 (search for similar items in EconPapers)
Date: 2009
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Related works:
Journal Article: Attitudes Towards Foreign Products and Welfare with Capital Mobility (2010)
Working Paper: Attitudes towards foreign products and welfare with capital mobility (2010)
Working Paper: Attitudes towards foreign products and welfare with capital mobility (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:rae:wpaper:200906

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