|
摘要
|
We study foreign direct investment (FDI) by two
independent investors/entrants into a two-tiered oligopolistic industry. An
FDI subsidy at a single stage of production can be sufficient to resolve the
coordination problem facing investors thereby inducing entry at both stages.
However, due to linkage offsetting, FDI at both stages may yield lower
domestic welfare than FDI at a single stage. Vertical integration not only
solves the coordination problem, it also eliminates double marginalization.
But since the integrated multinational does not sell the intermediate to
local firms, its entry generates no vertical linkages and can yield
lower welfare than FDI by independent firms.
|