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Competition, foreign direct investment and welfare

Mukherjee, Arijit; Sinha, Uday Bhanu

Competition, foreign direct investment and welfare Thumbnail


Uday Bhanu Sinha


In contrast to the usual belief, we show that a lower product-market competition may make the consumers better off and increase welfare when foreign firms strategically choose between export and foreign direct investment (FDI). A lower product-market competition may increase consumer surplus and welfare by inducing FDI. The higher welfare stems from the increased production efficiency under FDI compared to export by the foreign firm.


Mukherjee, A., & Sinha, U. B. (2016). Competition, foreign direct investment and welfare. Economics Letters, 139,

Journal Article Type Article
Acceptance Date Dec 13, 2015
Online Publication Date Dec 24, 2015
Publication Date Feb 1, 2016
Deposit Date Feb 10, 2016
Publicly Available Date Feb 10, 2016
Journal Economics Letters
Print ISSN 0165-1765
Electronic ISSN 0165-1765
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 139
Public URL
Publisher URL


Comp-fdi-consumer-EL-Final.pdf (225 Kb)

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