Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101121
Authors: 
Collie, David R.
Norman, George
Year of Publication: 
2013
Series/Report no.: 
Cardiff Economics Working Papers E2013/9
Abstract: 
We show that the static duopoly model in which firms choose between exporting and foreign direct investment is often a prisoners' dilemma game in which a switch from exporting to foreign direct investment reduces profits. By contrast, we show that when the game is repeated there is a range of parameters for which the firms can partially collude by choosing to export rather than invest. In this range, a reduction in export costs may undermine the partial collusion, causing a switch from export to investment.
Subjects: 
Economics
Foreign Direct Investment
Partial Collusion
Trade Liberalization
JEL: 
F12
F13
F23
Document Type: 
Working Paper

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