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Strategic Policy Towards Multinationals for Oligopolistic Industries
Author(s) -
Lai Edwin L.C.
Publication year - 2002
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00327
Subject(s) - multinational corporation , oligopoly , spillover effect , subsidy , business , corporation , government (linguistics) , foreign direct investment , international trade , international economics , economics , industrial organization , market economy , finance , microeconomics , welfare , linguistics , philosophy , macroeconomics
The author considers an environment with two firms, one domestically owned and one a foreign‐owned multinational corporation (MNC), both producing in the host (domestic) country. It is found that there are three distinct dimensions that affect a country’s strategic policy towards domestically‐owned firms and foreign‐owned firms: the number of policy instruments available to the host government (whether or not it can tax/subsidize both types of firms), the location of the market (in the host country or a third country), and the extent of spillover of the foreign‐owned firms’ production.