Walter, Elberfeld; Georg, Götz; Frank, Stähler - In: The B.E. Journal of Economic Analysis & Policy 5 (2005) 1, pp. 1-30
This paper shows that vertical foreign direct investment will reduce prices but the aggregate welfare effect is unambiguously positive only under free market entry. Using a standard model of imperfect competition, we develop this result by considering two different cases. In the first case, the...