Mixed Oligopoly and Foreign Direct Investment
By using a mixed duopoly model, this paper analyses the effects of domestic firm ownership status on foreign direct investment decisions. It is shown that, although public ownership can be understood as a protectionist device, foreign direct investment can only be an equilibrium strategy if the level of privatization of the domestic economy is high enough. Furthermore it is proved that foreign direct investment is harmful from a home welfare point of view.
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Volume (Year): 24 (2010)
Issue (Month): 1 ()
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