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FDI in Retail: A Theoretical Analysis

Author

Listed:
  • Debasmita Basu
  • Abhirup Sarkar

Abstract

In this article, we build a theoretical model of retail and wholesale trade to analyse the effects of the entry of multinationals in wholesale and retail markets on the size of the domestic retail sector and prices. We show that the domestic retailing sector will expand, the retail price will fall and the wholesale price will go up, if and only if the retailing cost of the MNCs is greater than the retailing cost of the domestic retailers. JEL Classifications: F13, F61, F63

Suggested Citation

  • Debasmita Basu & Abhirup Sarkar, 2018. "FDI in Retail: A Theoretical Analysis," Studies in Microeconomics, , vol. 6(1-2), pages 14-23, June.
    • Handle: RePEc:sae:miceco:v:6:y:2018:i:1-2:p:14-23
    DOI: 10.1177/2321022218771763
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    References listed on IDEAS

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    1. Tony Killick, 2001. "Globalisation and the Rural Poor," Development Policy Review, Overseas Development Institute, vol. 19(2), pages 155-180, June.
    2. Swinnen, Johan F.M. & Maertens, Miet, 2007. "From Public to Private Governance in the Food Supply Chains of Emerging Economies," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9417, European Association of Agricultural Economists.
    3. Graciela Ghezán & Mónica Mateos & Laura Viteri, 2002. "Impact of Supermarkets and Fast–Food Chains on Horticulture Supply Chains in Argentina," Development Policy Review, Overseas Development Institute, vol. 20(4), pages 389-408, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    FDI; Trade policy; retail sector; agriculture;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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