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Trade and FDI Liberalization in Multiple Oligopolies

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  • Kenji Fujiwara

    (School of Economics, Kwansei Gakuin University)

Abstract

This paper examines welfare effects of trade and FDI liberalization in a model where several oligopolistic industries compete for a common factor. With this general equilibrium effects, trade and FDI liberalization has a contrasting effect. While it is unclear whether trade liberalization benefits each country, it necessarily raises world welfare. When FDI is liberalized, the host country loses and the source country gains, resulting in no effect on world welfare. These results suggest that simultaneous liberalization of trade and FDI becomes welfare-improving for the world.

Suggested Citation

  • Kenji Fujiwara, 2015. "Trade and FDI Liberalization in Multiple Oligopolies," Discussion Paper Series 131, School of Economics, Kwansei Gakuin University, revised Jul 2015.
    • Handle: RePEc:kgu:wpaper:131
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    File URL: http://192.218.163.163/RePEc/pdf/kgdp131.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    trade liberalization; FDI liberalization; oligopoly; factor price; general equilibrium;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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