The welfare effects of attracting foreign direct investment in the presence of unemployment

Arbeitspapier

We develop a 2×2×2 model with the following features: (1) one sector is perfectly competitive while the other is oligopolistic; (2) one country has unemployment while the other attains full employment; (3) oligopolists move internationally; and (4) the ownership of each oligopolist is internationally shared. The welfare effects of various tax-cum-subsidies are examined. If the oligopolistic sector is capital intensive, subsidizing the oligopolists' profits, inflows, production or employment is more likely to harm the country. The number of domestically based oligopolists, the volume of domestic demand for the oligopoly-produced commodity, and the country's ownership share of oligopolists also influence the effect.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 959

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade Policy; International Trade Organizations ; Business Taxes and Subsidies including sales and value-added (VAT) ; State and Local Taxation, Subsidies, and Revenue ; Production Analysis and Firm Location: Government Policy
• Subject: Corporate Taxation ; Production Subsidies ; Unemployment ; Oligopoly

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ogawa, Yoshitomo ; Ono, Yoshiyasu
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/148187
• Last update: 10.03.2025, 11:44 AM CET