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Government, MNEs and Industry Development: A Perspective of Game Theory

Author

Listed:
  • Taotao Chen

    (School of Economics and Management, Tsinghua University, Beijing)

  • Afonso Fleury

    (University of São Paulo, São Paulo)

  • Maria Tereza Fleury

    (University of São Paulo, São Paulo)

  • Xiao Chen

    (School of Economics and Management, Tsinghua University, Beijing)

Abstract

This study analyzed the roles of government and MNEs in industrial development through the perspective of game theory based on the case of Brazilian automobile industry. First, we have confirmed that government and FDI could have positive effects on industrial development through a dynamic game process. Second, we confirmed the roles of import-substitution for establishing and export-promotion policy for upgrading industry in the context of dynamic game. Furthermore, we stressed some policies such as further opening-up, which was always neglected in static analysis. Third, we found that the bargaining power of the government primarily came from the advantages of the local market. The conclusion we explored may have the policy implication for developing countries especially for those who have huge local markets.

Suggested Citation

  • Taotao Chen & Afonso Fleury & Maria Tereza Fleury & Xiao Chen, 2020. "Government, MNEs and Industry Development: A Perspective of Game Theory," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 19(1), pages 1-26, June.
    • Handle: RePEc:ijb:journl:v:19:y:2020:i:1:p:1-26
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    business-government negotiation; inward FDI; MNEs; industrial development and growth; game theory;
    All these keywords.

    JEL classification:

    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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