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The pro‐competitive effects of foreign firm entry: Evidence from the Korean retail sector

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  • Kyung In Hwang

Abstract

I investigate the effect of foreign entry on host country market competition. Using a firm‐level data set for the Korean retail sector during the process of FDI liberalisation, I find that the increase in the number of foreign stores caused average markups across local firms to fall. I show that the channel through which FDI decreases local firms’ markups increased competition as opposed to productivity spillovers.

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  • Kyung In Hwang, 2022. "The pro‐competitive effects of foreign firm entry: Evidence from the Korean retail sector," The World Economy, Wiley Blackwell, vol. 45(5), pages 1587-1613, May.
    • Handle: RePEc:bla:worlde:v:45:y:2022:i:5:p:1587-1613
    DOI: 10.1111/twec.13178
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