Understanding local content descisions: economic analysis and an application to the automotive industry

Francisco M. Veloso*

*Autor correspondente para este trabalho

Resultado de pesquisarevisão de pares

20 Citações (Scopus)

Resumo

In industrializing regions, foreign investments often generate spillovers through regional backward links. This situation may create a gap between private and social valuations of resources, resulting in a level of local content below what would be optimal for the economy. This situation creates an opportunity for the enactment of domestic content regulations. This paper presents a model to understand how these policies condition the decisions of the economic agents and affect economic welfare. Then, it simulates the model using a case study of the automotive sector. Results suggest that, in certain conditions, this local content regulation can be welfare enhancing.
Idioma originalEnglish
Páginas (de-até)747-772
Número de páginas26
RevistaJournal of Regional Science
Volume46
Número de emissão4
DOIs
Estado da publicaçãoPublished - out 2006

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