Trade liberalization and aftermarket services for imports
Trade liberalization and aftermarket services for imports
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DOI:
10.2139/ssrn.2634941
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发表时间:
2015-07
期刊:
影响因子:
1.3
通讯作者:
Jota Ishikawa;H. Morita;H. Mukunoki
中科院分区:
文献类型:
--
作者:
Jota Ishikawa;H. Morita;H. Mukunoki
We analyze the provision of repair services (aftermarket services that are required for a certain fraction of durable units after sales) through an international duopoly model in which a domestic firm and a foreign firm compete in the domestic market. Trade liberalization in goods, if not accompanied by the liberalization of foreign direct investment (FDI) in services, induces the domestic firm to establish service facilities for repairing the foreign firm’s products. This weakens the firms’ competition in the product market, and the resulting anti-competitive effect hurts consumers and reduces world welfare. Despite the anti-competitive effect, trade liberalization may also hurt the foreign firm because the repairs reduce the sales of the imported good in the product market. Liberalization of service FDI helps resolve the problem because it induces the foreign firm to establish service facilities for its own products.