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International Joint Venture And Host‐Country Policies

Author

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  • Satya P. Das
  • Seiichi Katayama

Abstract

In the presence of international joint ventures, effects of policies like foreign equity cap, trade protection and domestic resource requirement restriction towards equity sharing and welfare are analysed. Foreign equity cap reduces host country's welfare. Trade protection lowers equity share for the local firm. It has a first‐order source of welfare gain as the internal efficiency of the firm improves. Also, there is a first‐order loss resulting from a leakage effect, since a part of the surplus goes to a foreign firm. A marginal domestic resource requirement restriction enhances the joint surplus of the venture and social welfare.

Suggested Citation

  • Satya P. Das & Seiichi Katayama, 2003. "International Joint Venture And Host‐Country Policies," The Japanese Economic Review, Japanese Economic Association, vol. 54(4), pages 381-394, December.
  • Handle: RePEc:bla:jecrev:v:54:y:2003:i:4:p:381-394
    DOI: 10.1111/1468-5876.t01-1-00065
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    Cited by:

    1. repec:ebl:ecbull:v:6:y:2007:i:21:p:1-11 is not listed on IDEAS
    2. Zou, Yuxiang & Chen, Tai-Liang, 2016. "International joint venture and welfare-improving tariff-tax reforms," International Review of Economics & Finance, Elsevier, vol. 46(C), pages 27-35.
    3. Onur Koska, 2009. "Foreign Direct Investment For Sale," Working Papers 0910, University of Otago, Department of Economics, revised Oct 2009.
    4. Zhong, Litao & Lahiri, Sajal, 2009. "International joint ventures and tax competition in an integrated market," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 38-44, January.
    5. Hamid Beladi & Sugata Marjit & Avik Chakrabarti, 2006. "Tariff Jumping and Joint Ventures," Working Papers 0002, College of Business, University of Texas at San Antonio.

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