This paper examines the implications of increasing globalisation of stock market ownership on the economics of protection. Current data on European stock exchanges indicate that over 30 per cent of the stock market is foreign-owned in most cases, a large increase on a couple of decades ago.This degree of foreign share-ownership is likely to change qualitatively the nature of the response of governments to FDI and support for 'domestic' firms. In particular, two worked examples, based upon duopoly theory, suggest that the level of foreign share-ownership is sufficient to render protection unattractive.
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Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number
2006_15.
Find related papers by JEL classification: F10 - International Economics - - Trade - - - General F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
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