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Commercial policy under cross-border ownership

Author

Listed:
  • Jota Ishikawa
  • Yoichi Sugita

Abstract

It is often observed that in order to serve the domestic market, foreign firms not only export but also control domestic firms through foreign direct investment (FDI). This paper examines the effects of tariffs, production subsidies, and foreign ownership regulation on prices, outputs, profits, and welfare when both exports and FDI coexist. Cross-border ownership on the basis of both financial interests and corporate control leads to horizontal market-linkages through which tariffs and production subsidies may not benefit local firms. The effects of ownership regulation depends on both the initial ownership share and the substitutability between goods

Suggested Citation

  • Jota Ishikawa & Yoichi Sugita, 2004. "Commercial policy under cross-border ownership," Econometric Society 2004 Far Eastern Meetings 663, Econometric Society.
    • Handle: RePEc:ecm:feam04:663
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    Citations

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    Cited by:

    1. 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.
    2. Hong-Ren Din & Kuang-Cheng Andy Wang & Wen-Jung Liang, 2016. "MFN vs Tariff Discrimination in the Presence of Cross Ownership," Review of International Economics, Wiley Blackwell, vol. 24(5), pages 1149-1166, November.
    3. Jota Ishikawa & Yoichi Sugita & Laixun Zhao, 2011. "Commercial Policy and Foreign Ownership," Review of International Economics, Wiley Blackwell, vol. 19(2), pages 300-312, May.

    More about this item

    Keywords

    foreign direct investment; corporate control; tariffs; production subsidies; ownership regulation;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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