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Attitudes towards foreign products and welfare with capital mobility

Author

Listed:
  • J.M. Callois

    (UMR METAFORT - Mutations des activités des espaces et des formes d'organisation dans les territoires ruraux - INRA - Institut National de la Recherche Agronomique - AgroParisTech - CEMAGREF - Centre national du machinisme agricole, du génie rural, des eaux et forêts - VAS - VetAgro Sup - Institut national d'enseignement supérieur et de recherche en alimentation, santé animale, sciences agronomiques et de l'environnement)

  • C. Gaigné

    (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)

Abstract

We develop a model of trade with imperfect competition to study the welfare implications in developing and developed countries of the asymmetry in attitudes towards foreign products. In the developed country, consumers benefit from a better perception of foreign products while the rental rate of capital declines as long as the location of capital remains unchanged. However, when capital is mobile, the developing country hosts more and more capital at the expense of the developed country as perception of varieties produced in the developed country improves and the surplus of consumers in the developed country can decrease.

Suggested Citation

  • J.M. Callois & C. Gaigné, 2010. "Attitudes towards foreign products and welfare with capital mobility," Post-Print hal-00546541, HAL.
    • Handle: RePEc:hal:journl:hal-00546541
    DOI: 10.1007/s11079-009-9115-y
    Note: View the original document on HAL open archive server: https://hal.science/hal-00546541v1
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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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