Foreign Direct Investment and Training in the Host Country: The Tariff-Jumping Argument Revisited - INRAE - Institut national de recherche pour l’agriculture, l’alimentation et l’environnement Access content directly
Journal Articles International Trade Journal Year : 2013

Foreign Direct Investment and Training in the Host Country: The Tariff-Jumping Argument Revisited

Abstract

We analyze the direct investment versus export decision of a multinational firm in competition with a potential entrant in a host country. We consider a workers' skills asymmetry between the host and the multinational home countries. We also give the multinational the possibility to train all (or a part of) the hired workers when investing. We show that an improvement in the workers' skills in the host country does not systematically increase the multinational incentive to invest. We also demonstrate that the tariff-jumping investment can improve the welfare of the host country even if it excludes the local firm from the market.
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Dates and versions

hal-02642001 , version 1 (28-05-2020)

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Abdelhakim Hammoudi, Wadii Hatit, Lamia Rouached. Foreign Direct Investment and Training in the Host Country: The Tariff-Jumping Argument Revisited. International Trade Journal, 2013, 27 (1), pp.36-62. ⟨10.1080/08853908.2013.738523⟩. ⟨hal-02642001⟩
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