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International Share Ownership, Profit Shifting and Protectionism

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  • T. Huw Edwards

Abstract

I examine the implications of increasing stock market globalisation for the economics of protection. European, Japanese and Australian data mostly indicate that over 30 per cent of the stock market is now foreign-owned, a large increase on the 1980s. Foreign share ownership in the USA is lower, but increasing fast. This degree of foreign share ownership is likely to change qualitatively the nature of governmental support for 'domestic' firms. A series of worked duopoly examples suggests that the level of foreign share ownership is usually sufficient for profit shifting on its own no longer to justify protection.

Suggested Citation

  • T. Huw Edwards, 2008. "International Share Ownership, Profit Shifting and Protectionism," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(2), pages 280-301, June.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200806)164:2_280:isopsa_2.0.tx_2-d
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    Cited by:

    1. T.Huw Edwards, 2009. "Regulatory Protection When Firms Move First," Discussion Paper Series 2009_19, Department of Economics, Loughborough University, revised Nov 2009.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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