Partial collusion and foreign direct investment

Arbeitspapier

We show that the static duopoly model in which firms choose between exporting and foreign direct investment is often a prisoners' dilemma game in which a switch from exporting to foreign direct investment reduces profits. By contrast, we show that when the game is repeated there is a range of parameters for which the firms can partially collude by choosing to export rather than invest. In this range, a reduction in export costs may undermine the partial collusion, causing a switch from export to investment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Cardiff Economics Working Papers ; No. E2013/9

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade Policy; International Trade Organizations ; Multinational Firms; International Business
• Subject: Economics ; Foreign Direct Investment ; Partial Collusion ; Trade Liberalization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Collie, David R. ; Norman, George
• Event: Veröffentlichung
• (who): Cardiff University, Cardiff Business School
• (where): Cardiff
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/101121
• Last update: 10.03.2025, 11:44 AM CET