Strategic Policy Towards Multinationals for Oligopolistic Industries | Zendy

Lai Edwin L.C. | Zendy

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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.

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