Endogenous FDI Spillovers from Japan to Russia and China with Spillover-Prevention Costs

Konferenzbeitrag

This paper explores the role of FDI-spillover prevention costs in the strategic choice for a MNE of a developed country such as Japan about whether it perform FDI to an emerging economy such as Russia and China and about a degree of FDI spillovers that it allows. After discussing the exogenous spillover case in a duopoly model, this paper shows that with a quadratic prevention cost function, the MNE may choose a positive level of spillovers lower than the benchmark exogenous level, and also shows how endogenizing spillovers affect the home firmfs decision on plant location. In the m-FDI-host-country firm case, the effects of the number of FDI-host country firms on the level of spillovers and the cutoff value of trade cost are not always monotonic.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: 54th Congress of the European Regional Science Association: "Regional development & globalisation: Best practices", 26-29 August 2014, St. Petersburg, Russia

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Multinational Firms; International Business ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: FDI ; Endogenous Spillovers ; Spillover-prevention Costs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Matsubara, Kiyoshi
• Event: Veröffentlichung
• (who): European Regional Science Association (ERSA)
• (where): Louvain-la-Neuve
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/124424
• Last update: 10.03.2025, 11:42 AM CET