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Innovation And Foreign Investment In A Dynamic Oligopoly

Author

Listed:
  • MARIA-LUISA PETIT

    (Universita' di Roma "La Sapienza", 00185 Rome, Italy)

  • FRANCESCA SANNA-RANDACCIO

    (Universita' di Roma "La Sapienza", 00185 Rome, Italy)

  • BOLESLAW TOLWINSKI

    (ORE, Operations Research Experts, Golden, Colorado, USA)

Abstract

The paper examines the impact of the firms' choice between export and foreign direct investment on the incentive to innovate, as well as the effects of innovation and technological spillovers on the firms' international strategy and on its changes over time. The innovation process is analysed in the context of a two-country imperfect competition market, modelled as an infinite horizon, non-linear dynamic game, for which Markov perfect equilibria are computed. Where the models are not tractable by analytical techniques, equilibria are calculated by using a computational procedure based on a policy iteration method.

Suggested Citation

  • Maria-Luisa Petit & Francesca Sanna-Randaccio & Boleslaw Tolwinski, 2000. "Innovation And Foreign Investment In A Dynamic Oligopoly," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 1-28.
    • Handle: RePEc:wsi:igtrxx:v:02:y:2000:i:01:n:s0219198900000032
    DOI: 10.1142/S0219198900000032
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    Citations

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    Cited by:

    1. Dawid, Herbert & Greiner, Alfred & Zou, Benteng, 2010. "Optimal foreign investment dynamics in the presence of technological spillovers," Journal of Economic Dynamics and Control, Elsevier, vol. 34(3), pages 296-313, March.
    2. Hebert Dawid & Benteng Zou, 2014. "Foreign direct investment in duopoly: When is it optimal to invest abroad?," DEM Discussion Paper Series 14-23, Department of Economics at the University of Luxembourg.

    More about this item

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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