Does North-South Integration Affect Multinational Firms' Strategies?

Autor:	Habib Zitouna, Sylvie Montout
Rok vydání:	2005
Předmět:	Economic integration Eviction media_common.quotation_subject Geography Planning and Development Wage International economics Competitor analysis Foreign direct investment Development Multinational corporation Economics Fixed cost Free trade media_common
Zdroj:	Review of International Economics. 13:485-500
ISSN:	1467-9396 0965-7576
DOI:	10.1111/j.1467-9396.2005.00519.x
Popis:	This paper aims to develop a theoretical model that shows how a firm's decision to make a foreign direct investment is influenced by a North–South regional economic integration. Our results suggest that tariff-jumping and export-platform strategies depend on a tradeoff between variable trade costs and fixed costs, in addition to wage differences. Furthermore, insiders may affect the strategic location of outsiders by dampening the market accessibility advantages induced by the trade liberalization process, which results in an eviction of the outsiders from the area. This effect, however, depends heavily on the level of fixed costs. Indeed, a decrease in the costs of implanting in the low-wage country gives the insiders a first-mover advantage that allows them to later evict their competitors.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::c1a5a7eb9117e9db4c0a9ff198158408 https://doi.org/10.1111/j.1467-9396.2005.00519.x Zobrazit plný text záznamu Plný text ve formátu PDF