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Article Dans Une Revue Journal of Public Economic Theory Année : 2023

FDI spillovers, New Industry Development, and Economic Growth

Thanh Tam Nguyen-Huu
Ngoc‐sang Pham
  • Fonction : Auteur

Résumé

The paper investigates the optimal strategy of a small open economy receiving FDI in an optimal growth context. We prove that no domestic firm can enter the new industry when the multinational enterprise’s productivity or the fixed entry cost is high. Nevertheless, the host country’s investment stock converges to a higher steady state than an economy without FDI. A domestic firm enters the new industry if its productivity is high enough. Moreover, the domestic firm can dominate or even eliminate its foreign counterpart.
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Dates et versions

hal-04240260 , version 1 (13-10-2023)

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Thanh Tam Nguyen-Huu, Ngoc‐sang Pham. FDI spillovers, New Industry Development, and Economic Growth. Journal of Public Economic Theory, inPress, ⟨10.1111/jpet.12670⟩. ⟨hal-04240260⟩
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