Raw Materials, Processing Incentives And Foreign Ownership
AbstractThe effect of foreign ownership on trade policy outcomes has long been a topic of interest, but only recently have the consequences of multiple levels of production been considered. We examine processing incentives in a simplified general equilibrium framework with foreign ownership of a primary factor. Second-best considerations mean non-intervention is sub-optimal, but multiple levels of production can lead to an investment terms-of-trade effect of indeterminate sign, depending critically on the production structure. We illustrate how this may change standard conclusions regarding the effect of trade restrictions where there is foreign ownership, and optimal intervention to achieve specific policy objectives.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2000 Annual meeting, July 30-August 2, Tampa, FL with number 21866.
Date of creation: 2000
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International Relations/Trade; Productivity Analysis;
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