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Policy competition for foreign direct investment between asymmetric countries

Author

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  • Bjorvatn, Kjetil
  • Eckel, Carsten

Abstract

The present paper analyses policy competition for foreign direct investment between countries of different size and different market structure. We demonstrate how policy competition affects the location decision of the foreign investor and derive welfare implications. The key variables in our analysis are intra-regional trade costs, differences in market size, and minimum wages.

Suggested Citation

  • Bjorvatn, Kjetil & Eckel, Carsten, 2006. "Policy competition for foreign direct investment between asymmetric countries," Munich Reprints in Economics 20270, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:20270
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    References listed on IDEAS

    as
    1. Nunnenkamp, Peter & Pant, Manoj, 2003. "Why the economic case for a multilateral agreement on investment is weak," Open Access Publications from Kiel Institute for the World Economy 4323, Kiel Institute for the World Economy (IfW Kiel).
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    4. Pedro P. Barros & Luís Cabral, 2000. "Competing for Foreign Direct Investment," Review of International Economics, Wiley Blackwell, vol. 8(2), pages 360-371, May.
    5. Haufler, Andreas & Wooton, Ian, 1999. "Country size and tax competition for foreign direct investment," Journal of Public Economics, Elsevier, vol. 71(1), pages 121-139, January.
    6. Andrew Charlton, 2003. "Incentive Bidding for Mobile Investment: Economic Consequences and Potential Responses," OECD Development Centre Working Papers 203, OECD Publishing.
    7. Kjetil Bjorvatn & Carsten Eckel, 2005. "Technological Spillovers and Export-platform FDI," International Economic Association Series, in: Edward M. Graham (ed.), Multinationals and Foreign Investment in Economic Development, chapter 4, pages 85-93, Palgrave Macmillan.
    8. Fumagalli, Chiara, 2003. "On the welfare effects of competition for foreign direct investments," European Economic Review, Elsevier, vol. 47(6), pages 963-983, December.
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