Rules of origin and technology spillovers from foreign direct investment under international duopoly
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文摘
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We analyze the optimal choice of rules of origin (ROO) in FTA.

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A simple three-country model of international duopoly is employed.

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Firms from outside the FTA must undertake FDI to comply with the ROO.

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FDI causes technology spillovers, depending on the stringency of ROO.

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We predict the level of ROO is positively correlated with the average MFN tariffs.

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