Integration Magnifies Locational Subsidy Effects and Cross-Border Ownership?
AbstractThis paper investigates the welfare effects of an increase in location subsidy by constructing a general equilibrium linear space model, including transport costs and the cross-border ownership of equities. We assume a market structure with monopolistic competition in which entry is restricted and where fixed costs are not necessary. These model characteristics allow us to obtain the analytical welfare effects that have yet to be examined. We find that the subsidy increase improves (reduces) the domestic (foreign) welfare, regardless of the size of transport costs. However, closer economic integration magnifies the impacts of the location subsidy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 28 (2013)
Issue (Month): ()
Location Subsidy; Cross-border Ownership; Economic Integration; Welfare;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F20 - International Economics - - International Factor Movements and International Business - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee).
If references are entirely missing, you can add them using this form.