Location of foreign direct investment in a regional integration area
In a regional integration area two processes take place simultaneously: the fall of trade costs and the regional convergence of per capita of the countries. The impact of these trends upon the location of the productive activity is examined through a static two person noncooperative game where each player(firm)selects one of three spatial strategies: to locate a single plant in the large country to locate a single plant in the small country and to settle a multiplant firm in the two countries. It can be inferred that to locate a plant in the small country is always a dominated strategy. The degree of symmetry in market size in the two countries appears as the major factor of the feasibility of production in the small peripheral economy.On the other hand, the fall of trade costs has a sensible impact upon the location of production only for intermediate levels of regional convergence. The "tariff jumping" argument for FDI has a limited field of application.
Volume (Year): 18 (2001)
Issue (Month): 5 ()
|Contact details of provider:|| |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Markusen, James R. & Venables, Anthony J., 1999.
"Foreign direct investment as a catalyst for industrial development,"
European Economic Review,
Elsevier, vol. 43(2), pages 335-356, February.
- James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
- Richard E. Baldwin & Gianmarco I. P. Ottaviano, 1998.
"Multiproduct Multinationals and Reciprocal FDI Dumping,"
NBER Working Papers
6483, National Bureau of Economic Research, Inc.
- Baldwin, Richard E. & Ottaviano, Gianmarco I. P., 2001. "Multiproduct multinationals and reciprocal FDI dumping," Journal of International Economics, Elsevier, vol. 54(2), pages 429-448, August.
- Baldwin, Richard & Ottaviano, Gianmarco, 1998. "Multiproduct Multinationals and Reciprocal FDI Dumping," CEPR Discussion Papers 1851, C.E.P.R. Discussion Papers.
- Markusen, James R. & Venables, Anthony J., 1998.
"Multinational firms and the new trade theory,"
Journal of International Economics,
Elsevier, vol. 46(2), pages 183-203, December.
- Ekholm, Karolina & Forslid, Rikard, 1997. "Agglomeration in a Core-Periphery Model with Vertically and Horizontally Integrated Firms," CEPR Discussion Papers 1607, C.E.P.R. Discussion Papers.
- B.Curtis Eaton & Richard G. Lipsey, 1972.
"The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition,"
87, Queen's University, Department of Economics.
- B. Curtis Eaton & Richard G. Lipsey, 1975. "The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition," Review of Economic Studies, Oxford University Press, vol. 42(1), pages 27-49.
When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-01r10002. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.