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Content Protection, Resource Allocation, and Variable Labour Supply

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  • Michael Ka-Yiu Fung

Abstract

A three-sector general equilibrium model is used to study the implications of an increase in content protection under the assumption of variable labor supply. The role of variable labor supply is highlighted in the paper. An increase in domestic content requirements increases the equilibrium labor supply, which magnifies the policy effects on the output levels (of agricultural, manufacturing, and intermediate goods) and the imports of foreign intermediates. Furthermore, the policy change may increase the national income of the economy while the national welfare is decreased.

Suggested Citation

  • Michael Ka-Yiu Fung, 1994. "Content Protection, Resource Allocation, and Variable Labour Supply," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 175-182, February.
    • Handle: RePEc:cje:issued:v:27:y:1994:i:1:p:175-82
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    Cited by:

    1. Fung, Michael Ka-Yiu & Zeng, Jinli, 1997. "Equity control of multinational firms in an economic growth model with urban unemployment," International Review of Economics & Finance, Elsevier, vol. 6(3), pages 287-301.
    2. Jie-A-Joen, C. & Belderbos, R.A. & Sleuwaegen, L., 1998. "Local content requirements, vertical cooperation, and foreign direct investment," Research Memorandum 001, Maastricht University, Netherlands Institute of Business Organization and Strategy Research (NIBOR).
    3. Davies, Ronald B. & Ellis, Christopher J., 2007. "Competition in taxes and performance requirements for foreign direct investment," European Economic Review, Elsevier, vol. 51(6), pages 1423-1442, August.

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