Host market competition, foreign FDI and domestic welfare

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

2 Scopus Citations
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Author(s)

  • Yingyi Tsai
  • Arijit Mukherjee
  • Jong-Rong Chen

Detail(s)

Original languageEnglish
Pages (from-to)13-22
Journal / PublicationInternational Review of Economics and Finance
Volume42
Online published21 Oct 2015
Publication statusPublished - Mar 2016

Abstract

This paper studies the impact on domestic welfare and a foreign firm's entry mode of a greater host market competition. We find that a stronger domestic competition may attract or deter FDI. We also show that higher domestic competition can raise domestic welfare either when it attracts FDI or when it does not affect the foreign firm's entry mode choice. Nonetheless, higher domestic competition may reduce domestic welfare if FDI is deterred. Our finding suggests that competition policy in the host country ought to be complemented by its foreign investment policy when foreign firm makes its FDI/export decision.

Research Area(s)

  • Domestic competition, Foreign direct investment, Welfare

Citation Format(s)

Host market competition, foreign FDI and domestic welfare. / Tsai, Yingyi; Mukherjee, Arijit; Chen, Jong-Rong.

In: International Review of Economics and Finance, Vol. 42, 03.2016, p. 13-22.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review