Regional Integration and the (Re)Location Choice of MNCs

• Autores: Facundo Albornoz, Gregory Corcos
• Localización: XII Encuentro de Economía Pública. Evaluación de las Políticas Públicas: Palma de Mallorca. Los días 3 y 4 de febrero de 2005, 2005, pág. 1
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • How does regional integration affect the location of MultiNational Companies, and member countries� investment incentives? The welfare effects of integration and subsidy competition are found to depend crucially on market structure, technological differences, ownership, positive externalities to the MNC�s investment and the interplay between subsidies and tariffs. We show how Subsidy Competition may reduce welfare relative to the mutual interdiction of subsidies. We find justifications for intra-regional transfers and identify under which conditions the gain associated with supra-regional agreements increases with integration. We also identify conditions under which, with a local MNC in oligopoly, integration may reduce regional welfare.