Transport Infrastructure Investments and Competition for FDI

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Title: Transport Infrastructure Investments and Competition for FDI
Authors: Hynes, Kate
Ma, Jie
Yuan, Cheng
Permanent link: http://hdl.handle.net/10197/9092
Date: Sep-2017
Abstract: This paper studies how transport infrastructure investments affect a bidding war for a firm between two asymmetric countries within a region in a context of imperfect competition, where transport infrastructure investments play the role of a global public good, leading to a reduction in the unit trade cost between the two countries. A number of interesting results are derived from the model. In particular, transport infrastructure investments can intensify fiscal competition between the two countries. Surprisingly, this conventional wisdom seems to be confirmed by this paper for the first time. Welfare implications of the model are also examined.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Copyright (published version): 2017 the Authors
Keywords: Transport infrastructure investments;Fiscal competition;FDI;Imperfectly competitive market
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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