This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Competing for Foreign Direct Investment

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Barros, Pedro P
Cabral, Luis

Additional information is available for the following registered author(s):

Abstract

The paper analyzes "subsidy games" between countries in order to attract foreign direct investment (FDI) from a third country. The winner of this game results from the interaction of two factors, relative country size and employment gains from FDI: a large (or "central") country is more likely to attract FDI, and so is a country with high unemployment. The subsidy equilibrium is compared with two alternative solutions: zero subsidies and first-best subsidies. It is shown that total welfare may be greater under subsidy competition than under zero subsidies: the gains from efficient location implied by subsidy competition may more than outweigh the losses from higher subsidies. Moreover, departing from subsidy competition to zero subsidies or to first-best subsidies (without side payments) implies a gain to one country and a loss to the other. This suggests that it may be difficult to reach a consensus to move away from the status quo of subsidy competition. Copyright 2000 by Blackwell Publishing Ltd.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=roie&volume=8&issue=2&year=2000&part=null
File Format: text/html
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Blackwell Publishing in its journal Review of International Economics.

Volume (Year): 8 (2000)
Issue (Month): 2 (May)
Pages: 360-71
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:bla:reviec:v:8:y:2000:i:2:p:360-71

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0965-7576

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
  1. J Peter Neary, 2001. "Foreign Direct Iinvestment and the Single Market," Working Papers 200124, School Of Economics, University College Dublin. [Downloadable!]
    Other versions:
  2. Kazuharu Kiyono & Fang Wei, 2008. "The role of location choice in strategic export promotion policy: capital liberalization incentives of exporting countries," Journal of Economics, Springer, vol. 95(1), pages 55-74, October. [Downloadable!] (restricted)
  3. Facundo Albornoz and Gregory Corcos, 2005. "Subsidy Competition in Integrating Economies," Discussion Papers 05-14, Department of Economics, University of Birmingham. [Downloadable!]
    Other versions:
  4. Blomström, Magnus & Kokko, Ari, 2003. "The Economics of Foreign Direct Investment Incentives," EIJS Working Paper Series 168, The European Institute of Japanese Studies.
    Other versions:
  5. Haufler, Andreas, 2006. "Die Besteuerung multinationaler Unternehmen," Discussion Papers in Economics 1153, University of Munich, Department of Economics. [Downloadable!]
  6. Osiris J.Parcero, 2006. "Inter-jurisdiction Subsidy Competition for a New Production Plant: What is the Central Government Optimal Policy?," CRIEFF Discussion Papers 0601, Centre for Research into Industry, Enterprise, Finance and the Firm. [Downloadable!]
    Other versions:
  7. Barbara G. Katz & Joel Owen, 2003. "Should Governments Compete for Foreign Direct Investment?," Working Papers 03-07, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
    Other versions:
  8. Johannes Van Biesebroeck, 2008. "Bidding for Investment Projects: Smart Public Policy or Corporate Welfare?," Working Papers tecipa-344, University of Toronto, Department of Economics. [Downloadable!]
  9. O. Amerighi & G. De Feo, 2007. "Competition for FDI in the Presence of a Public Firm and the Effects of Privatization," Working Papers 605, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  10. Facundo Albornoz, 2007. "Subsidy Competition and the Mode of FDI: Acquisition vs Greenfield," Discussion Papers 05-15R, Department of Economics, University of Birmingham. [Downloadable!]
    Other versions:
  11. C. Dembour, 2008. "Competition for Business Location: A Survey," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 89-111, June. [Downloadable!] (restricted)
  12. Kjetil Bjorvatn & Carsten Eckel, 2003. "Winners and losers from an international investment agreement," CMI Working Papers WP 2003:11, CMI (Chr. Michelsen Institute), Bergen, Norway. [Downloadable!]
  13. M. Rosenboim & I. Luski & T. Shavit, 2008. "Behavioral approaches to optimal FDI incentives," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(7), pages 601-607. [Downloadable!]
  14. Havranek, Tomas, 2008. "The Supply of Foreign Direct Investment Incentives: Subsidy Competition in an Oligopolistic Framework," MPRA Paper 10770, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  15. Mario Mariniello, 2006. "State Aid to Attract FDI and the European Competition Policy: Should Variable Cost Aid Be Banned?," Economics Working Papers ECO2006/41, European University Institute. [Downloadable!]
  16. Haaland, Jan I. & Wooton, Ian, 2003. "Domestic Labour Markets and Foreign Direct Investment," CEPR Discussion Papers 3989, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  17. Duarte Brito & Pedro Pereira, 2006. "Access to Bottleneck Inputs under Oligopoly: a Prisoners Dilemma?," Working Papers 16, Portuguese Competition Authority. [Downloadable!]
  18. Maximilian Auffhammer & Richard Carson, 2007. "Forecasting the Path of China's CO2 Emissions Using Province Level Information," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 971, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
    Other versions:
  19. Toshihiro Okubo, . "Trade Liberalisation and Agglomeration with Firm Heterogeneity----Forward and Backward Linkages," HEI Working Papers 16-2006, Economics Section, The Graduate Institute of International Studies. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? Springer Verlag was the first commercial publisher to be listed on RePEc.

This page was last updated on 2009-11-22.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.