EXPORTS VERSUS FDI IN SMITH-MOTTA FRAMEWORK

• Authors: Cieślik Andrzej
• Languages of publication: EN

Abstracts

EN

In this paper we study the choice between exporting and foreign direct investment (FDI) in the Smith-Motta duopoly framework. First, we identify the conditions necessary for exporting and FDI, depending on the costs of exporting and the cost of foreign investment. Then, we discuss various proximity-concentration tradeoffs. Finally, we demonstrate that six possible types of equilibriums may emerge depending on various combinations of the key parameters of the model. These equilibriums include: a monopoly FDI equilibrium, a monopoly exporting equilibrium, a domestic monopoly equilibrium, a duopoly FDI equilibrium, a duopoly exporting equilibrium, and no entry equilibrium

Keywords

EN

exporting; foreign direct investment; proximity-concentration tradeoff

• Publisher: Instytut Badań Gospodarczych
• Journal: Equilibrium. Quarterly Journal of Economics and Economic Policy
• Year: 2016
• Volume: 11
• Issue: 2
• Pages: 189-218

Contributors

author

Cieślik Andrzej

Identifiers

DOI

10.12775/EQUIL.2016.009