'Globalization' and Relocation in a Vertically Differentiated Industry /
This paper uses a vertical differentiation duopoly framework to analyze firms' relocation decisions, when the removal of trade barriers or restrictions on capital outflows or inflows ('globalization') allows them to serve the domestic market through foreign plants in low-wage countrie...
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| Format: | Journal |
| Language: | English |
| Published: |
Washington, D.C. :
International Monetary Fund,
1998.
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| Series: | IMF Working Papers; Working Paper ;
No. 1998/048 |
| Online Access: | Full text available on IMF |
| Summary: | This paper uses a vertical differentiation duopoly framework to analyze firms' relocation decisions, when the removal of trade barriers or restrictions on capital outflows or inflows ('globalization') allows them to serve the domestic market through foreign plants in low-wage countries. The relocation of the entire industry yields net welfare costs, but the relocation of one (and only one) firm, may be welfare improving. When the economy is 'high-(or low-) quality biased,' the relocation of the firm producing the high- (or low-) quality variant is preferred, on welfare terms, to that of other firms, if the wage differential is large enough. |
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| Item Description: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Physical Description: | 1 online resource (20 pages) |
| Format: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Access: | Electronic access restricted to authorized BRAC University faculty, staff and students |