Competition, foreign direct investment and welfare

Mukherjee, Arijit and Sinha, Uday Bhanu (2016) Competition, foreign direct investment and welfare. Economics Letters, 139 . pp. 43-45. ISSN 0165-1765

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In contrast to the usual belief, we show that a lower product-market competition may make the consumers better off and increase welfare when foreign firms strategically choose between export and foreign direct investment (FDI). A lower product-market competition may increase consumer surplus and welfare by inducing FDI. The higher welfare stems from the increased production efficiency under FDI compared to export by the foreign firm.

Item Type: Article
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > Nottingham University Business School
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Depositing User: Fuller, Stella
Date Deposited: 10 Feb 2016 11:43
Last Modified: 16 Oct 2017 11:45

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