Template-Type: ReDIF-Paper 1.0

Author-Name: Ferdinand Mittermaier
Author-X-Name-First: Ferdinand
Author-X-Name-Last: Mittermaier

Title: Subsidy competition and the role of firm ownership

Abstract: This paper addresses the role that foreign vs. domestic ownership of companies plays
for governments in asymmetric countries’ competition for a multinational’s subsidiary.
I argue that equilibrium subsidies as well as a foreign investor’s location decision in
policy competition between these countries critically depend on the ownership structure
of incumbent firms. This shows that small countries with few national incumbents
in an industry may be successful in attracting multinationals.
Length:  13 pages
Creation-Date:  2007-09
File-URL: http://www.bgpe.de/texte/DP/032_mittermayer.pdf
File-Format: Application/pdf
File-Function: First version, 2007
Number: 032
Classification-JEL: F12; F23; H25; L13
Keywords: Subsidy competition, foreign direct investment, regional location
Handle: RePEc:bav:wpaper:032_mittermaier