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Commercial Policy and Foreign Ownership

Author

Listed:
  • Ishikawa, Jota
  • 石川, 城太
  • Sugita, Yoichi
  • 杉田, 洋一
  • Zhao, Laixun
  • 趙, 来勲

Abstract

To serve the domestic market, foreign multinationals often not only export there but also control local firms through FDI. This paper examines the effects of trade and industrial policies on prices, outputs, profits, and welfare when exports and FDI coexist. Specifically, we focus on the case in which a foreign firm has full control of a local firm through partial ownership. 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 harm a locally-owned firm but benefit a foreign firm. Foreign ownership regulation benefits a locally-owned firm.
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(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ishikawa, Jota & 石川, 城太 & Sugita, Yoichi & 杉田, 洋一 & Zhao, Laixun & 趙, 来勲, 2008. "Commercial Policy and Foreign Ownership," CCES Discussion Paper Series 2, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    • Handle: RePEc:hit:ccesdp:2
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    References listed on IDEAS

    as
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    17. repec:bla:scotjp:v:48:y:2001:i:3:p:345-59 is not listed on IDEAS
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    Cited by:

    1. Kuang-Cheng Andy Wang & Yi-Jie Wang & Wen-Jung Liang & Chao-Cheng Mai, 2017. "Optimal licensing with equity," Papers in Regional Science, Wiley Blackwell, vol. 96, pages 207-220, March.
    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. Lee, Chien-Hui & Lee, Jen-Yao & Wang, Leonard F.S., 2021. "Foreign Ownership and Optimal Discriminatory Tariffs under Oligopolistic Competition," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 74(1), pages 97-114.

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    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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