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;
Other versions of this item:
- Laixun Zhao, 1996. "The Complementarity Between Endogenous Protection And Direct Foreign Investment," Economics and Politics, Wiley Blackwell, vol. 8(1), pages 61-72, 03.
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- Koichi Kagitani, 2003. "Resistance to Trade Liberalization in Unionized Sector," Open Economies Review, Springer, vol. 14(4), pages 419-435, October.
- Blonigen, Bruce A. & Ohno, Yuka, 1998. "Endogenous protection, foreign direct investment and protection-building trade," Journal of International Economics, Elsevier, vol. 46(2), pages 205-227, December.
- Pi, Jiancai & Zhou, Yu, 2013. "Institutional quality and skilled–unskilled wage inequality," Economic Modelling, Elsevier, vol. 35(C), pages 356-363.
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