Authors: Kiyoshi Matsubara
Addresses: College of Commerce, Nihon University, 5-2-1 Kinuta, Setagaya, Tokyo 157-8570, Japan
Abstract: This paper extends the Symeonidis's (2003) oligopoly model to discuss how FDI spillovers that decrease the quality difference between vertically differentiated products of home and foreign firms affect the home firm's decision on plant location. This paper shows that whether the degree of spillover is exogenous or endogenous, it may have a positive relationship with a unit trade cost. It also shows that in an oligopoly model with two home firms, FDI is more likely than in a duopoly case. The hypothesis in the duopoly model is supported by the cross-country regression over 41 for developing/emerging economies.
Keywords: FDI spillovers; IPR; intellectual property rights; product differentiation; foreign direct investment; Symeonidis; oligopoly model; plant location; duopoly model; emerging economies.
International Journal of Trade and Global Markets, 2012 Vol.5 No.1, pp.57 - 67
Published online: 31 Dec 2014 *Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article