Abstract
This chapter considers the operation of a local content requirement in a duopsony between domestic and foreign firms and demonstrates its consequences for the domestic producer of a final good. It is shown that content protection may have perverse effects on a foreign firm’s profits and may be welfare-improving overall, shifting profits from the domestic firm to both the foreign firm and domestic input producers.
Original language | English |
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Title of host publication | Dimensions of Trade Policy |
Publisher | World Scientific Publishing Co. Pte Ltd |
Pages | 3-17 |
Number of pages | 15 |
ISBN (Electronic) | 9789813207615 |
ISBN (Print) | 9789813207608 |
DOIs | |
Publication status | Published - 1 Jan 2017 |