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Callois J.M. and Gaigné C. "Attitudes Towards Foreign Products and Welfare with Capital Mobility". Open Economies Review, Springer Netherlands, May, 2009 923-7992

Abstract: We develop a model of trade with imperfect competition to study the welfare implications in developing and developed countries of the asymmetry in attitudes towards foreign products. In the developed country, consumers benefit from a better perception of foreign products while the rental rate of capital declines as long as the location of capital remains unchanged. However, when capital is mobile, the developing country hosts more and more capital at the expense of the developed country as perception of varieties produced in the developed country improves and the surplus of consumers in the developed country can decrease.
by Jean Christophe BUREAU last modified 16-04-2010 19:58
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