The Complementarity between Endogenous Protection and Direct Foreign Investment
AbstractThis paper studies the endogenous relationship between direct foreign investment (DFI) and trade restriction. A domestic labor union interested in both employment and wages bargains with a foreign firm and lobbies against foreign imports. By endogeneizing the wage rate and incorporating resource-using lobbying, we show that more DFI results in higher lobbying efforts and lower imports under fairly general conditions, i.e. a reversal of quid pro quo DFI. We also conduct comparative statics analysis on wages and lobbying efforts.
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Bibliographic InfoPaper provided by Otaru University of Commerce in its series ビジネス創造センターディスカッション・ペーパー (Discussion papers of the Center for Business Creation) with number 10252/4186.
Length: 19 pages
Date of creation: Feb 1995
Date of revision:
Publication status: Published in Discussion paper series (1995), 13: 1-19
Lobbying; Endogenous Protection; Quid Pro Quo DFI;
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