Recent evidence shows that developing and transition economies are increasingly privatizing their public firms and also experiencing rapid growth of inward foreign direct investment (FDI). In an international mixed oligopoly with strategic tax/subsidy policies, we analyze the interaction between...

The strength of intellectual property rights (IPR) in host countries is often considered to be an important determinant of inward foreign direct investment (FDI). Considering FDI to a developing or a newly industrialized country, we show that the host-country firm's innovative activity, which is...

Whether higher productivity of the foreign firm increases host country welfare depends on whether the reason for foreign direct investment (FDI) is to save the trade cost or to get the advantage of cheap labor. We show that, if the reason for FDI is to get the advantage of cheap labor, higher...

Assuming linear demand and unit transportation cost, Head and Ries (2003, 'Heterogeneity and the FDI versus export decision of Japanese manufacturers', Journal of the Japanese and International Economies) conclude that the theoretical prediction of Helpman et al. (2004, 'Export versus FDI with...

This paper examines the production strategies of an international firm. We show that foreign direct investment acts as a signal to overcome an asymmetric information problem in the host-country. We find that a host-country will prefer a situation where a technologically superior (inferior) firm...

While empirical evidence shows considerable innovative activities by the Southern firms, these activities have been ignored in determining the relationship between Southern patent regime and foreign direct investment (FDI) by the Northern firms. We show that whether a stronger Southern patent...

We provide a new explanation for a profitable horizontal merger between Cournot oligopolists with symmetric constant returns to scale technologies and homogeneous goods. We show that a merger can be profitable if it prevents a foreign firm from undertaking FDI. Our result is due to the effect of...

The issue of economic governance is highly discussed pertaining to the question of industrialisation of a country, yet the literature on international trade and foreign direct investment (FDI) hardly pays attention to this aspect. We show that higher investment in economic governance attracts...

The issue of economic governance is highly discussed pertaining to the question of industrialisation of a country, but the literature on trade and foreign direct investment (FDI) hardly pays attention to this aspect. We develop a simple model to show how better governance affects inward FDI and...

The issue of economic governance is highly discussed pertaining to the question of industrialisation of a country, but the literature on trade and foreign direct investment (FDI) hardly pays attention to this aspect. We develop a simple model to show how good economic governance in the domestic...