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Trade and FDI liberalization in a general oligopolistic equilibrium

Author

Listed:
  • Kenji Fujiwara

    (School of Economics, Kwansei Gakuin University)

Abstract

Incorporating recent evidence that FDI _rms are more e_cient than exporters into a general oligopolistic equilibrium model, this paper examines the welfare e_ects of trade and FDI liberalization. We _nd that trade liberalization alone is bene_cial if the di_erence in marginal cost between the exporting and FDI industries is small enough while FDI liberalization unambiguously improves welfare. Combining these results, we further show that simultaneous liberalization of trade and FDI necessarily turns out welfare-improving.

Suggested Citation

  • Kenji Fujiwara, 2016. "Trade and FDI liberalization in a general oligopolistic equilibrium," Discussion Paper Series 150, School of Economics, Kwansei Gakuin University, revised Nov 2016.
    • Handle: RePEc:kgu:wpaper:150
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade liberalization; FDI liberalization; General oligopolistic equilibrium; Welfare;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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