GTAP Resources: Resource Display
| GTAP Resource #4876 |
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"Production Patterns of Multinational Enterprises: The Knowledge-Capital Model Revisited" by Oyamada, Kazuhiko Abstract To prepare an answer to the question of how a developing country can attract FDI, this paper explored the factors and policies that may help bring FDI into a developing country by utilizing an extended version of the knowledge-capital model. With a special focus on the effects of FTA/EPA between a market country and a developing country, simulations with the model revealed the following: (1) although FTA/EPA generally tends to increase FDI to a developing country, the possibility to improve welfare through increased demand for skilled and unskilled labor becomes lower as the size of the country grows; (2) a developing country may suffer severe welfare losses through FTA/EPA if the availability of skilled labor is extremely limited; (3) because the additional implementation of cost-saving policies to reduce the firm-type/trade-link specific fixed cost tends to depreciate the price of skilled labor by saving its input, a developing country can enhance welfare gains from FTA, and it is even possible to recover the welfare effects from negative to positive, by making the arrangement to be EPA. |
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- Foreign direct investment - Not Applicable |
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Public Access  GTAP Resource 4876 (547.2 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions Since this version still is a work in progress, specific details might be subject to change. |
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Last Modified: 9/15/2023 2:05:45 PM
