Skip to main content

Research Repository

Advanced Search

Host market competition, foreign FDI and domestic welfare

Tsai, Yingyi; Mukherjee, Arijit; Chen, Jong-Rong

Authors

Yingyi Tsai

Jong-Rong Chen



Abstract

This paper studies the impact on domestic welfare and a foreign firm's entry mode of a greater host market competition. We find that a stronger domestic competition may attract or deter FDI. We also show that higher domestic competition can raise domestic welfare either when it attracts FDI or when it does not affect the foreign firm's entry mode choice. Nonetheless, higher domestic competition may reduce domestic welfare if FDI is deterred. Our finding suggests that competition policy in the host country ought to be complemented by its foreign investment policy when foreign firm makes its FDI/export decision.

Journal Article Type Article
Publication Date Mar 1, 2016
Journal International Review of Economics & Finance
Print ISSN 1059-0560
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 42
Pages 13-22
APA6 Citation Tsai, Y., Mukherjee, A., & Chen, J. (2016). Host market competition, foreign FDI and domestic welfare. International Review of Economics and Finance, 42, 13-22. doi:10.1016/j.iref.2015.10.016
DOI https://doi.org/10.1016/j.iref.2015.10.016
Keywords Economics and Econometrics; Finance
Publisher URL https://www.sciencedirect.com/science/article/pii/S1059056015001665?via%3Dihub
;