英文摘要 |
Many members of the WTO, including developed and non-developed countries, have engaged in economic integration under the framework of the WTO to reduce trade barriers and to improve the efficiency of resource distribution and welfare. In the present study, we utilize a generalized oligopoly model to analyze how economic integration between two countries with income disparity affects their welfare and FDI, and have reached the following conclusions. If the governments of the two countries do not impose any tax or subsidy policy on FDI, (1) the country with higher income will attract more FDI; (2) the magnitude of the FDI is positively related to the income disparity; (3) the FDIs will not be affected by the trade cost. On the other hand, if the two governments impose taxes or subsidies on FDI, (1) the governments will levy taxes (subsidies) on FDI if the trade cost is small (large); (2) FDI to the low-income country is higher than that to the high-income country, and the difference in FDIs increases with the integration; (3) both countries are better off after economic integration. |