Subsidy competition and the role of firm ownership
AbstractThis paper addresses the role that foreign vs. domestic ownership of companies plays for governments in asymmetric countries’ competition for a multinational’s subsidiary. I argue that equilibrium subsidies as well as a foreign investor’s location decision in policy competition between these countries critically depend on the ownership structure of incumbent firms. This shows that small countries with few national incumbents in an industry may be successful in attracting multinationals.
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Bibliographic InfoPaper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 032.
Length: 13 pages
Date of creation: Sep 2007
Date of revision:
Subsidy competition; foreign direct investment; regional location;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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