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Attitudes towards foreign products and welfare with capital mobility

  • J.M. Callois

    (METAFORT - Mutations des activités, des espaces et des formes d'organisation dans les territoires ruraux - CEMAGREF-UR MECF - INRA : UMR1273 - Ecole Nationale du Génie Rural des Eaux et Forêts - ENITA Clermont)

  • C. Gaigné

    (Structures et Marché Agricoles, Ressources et Territoires - INRA - Agrocampus Ouest)

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.

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Paper provided by HAL in its series Post-Print with number hal-00546541.

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Date of creation: 2010
Date of revision:
Publication status: Published, Open Economies Review, 2010, 21, 5, 26 p.
Handle: RePEc:hal:journl:hal-00546541
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  1. GINSBURGH, Victor & PAPAGEORGIOU, Yorgo & THISSE, Jacques-François, . "On existence and stability of spatial equilibria and steady-states," CORE Discussion Papers RP 651, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. OTTAVIANO, Gianmarco & THISSE, Jacques-François, 1999. "Agglomeration and trade revisited," CORE Discussion Papers 1999041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Matthieu Crozet & Hélène Erkel-Rousse, 2004. "Trade performances, product quality perceptions and the estimation of trade price-elasticities," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00096826, HAL.
  4. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
  5. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
  6. Verlegh, Peeter W. J. & Steenkamp, Jan-Benedict E. M., 1999. "A review and meta-analysis of country-of-origin research," Journal of Economic Psychology, Elsevier, vol. 20(5), pages 521-546, October.
  7. Ottaviano, Gianmarco & Thisse, Jacques-François, 2003. "Agglomeration and Economic Geography," CEPR Discussion Papers 3838, C.E.P.R. Discussion Papers.
  8. D. Neven & G. Norman & Jacques-Francois Thisse, 1991. "Attitudes toward Foreign Products and International Price Competition," Canadian Journal of Economics, Canadian Economics Association, vol. 24(1), pages 1-11, February.
  9. Gilles Grolleau & Tarik Lakhal & Naoufel Mzoughi, 2004. "Does Ethical Activism Lead to Firm Relocation?," Kyklos, Wiley Blackwell, vol. 57(3), pages 387-402, 08.
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