2010 Fiscal Year Final Research Report

International trade, FDI, and policies based on heterogeneities of firms

Research Project

Project/Area Number	20730169
Research Category	Grant-in-Aid for Young Scientists (B)
Allocation Type	Single-year Grants
Research Field	Applied economics
Research Institution	Tohoku Gakuin University
Principal Investigator	KURATA Hiroshi Tohoku Gakuin University, 経済学部, 准教授 (60411245)
Project Period (FY)	2008 – 2010
Keywords	不完全競争 / 企業立地 / 海外直接投資 / サービス産業 / 国際貿易 / 人為的低金利政策
Research Abstract	We investigate whether patterns of trade and foreign direct investment are efficient from the economic welfare point of view in the situation with heterogeneity of firms, and whether policies creating heterogeneity of firms improve economic welfare. In the case where intrinsic costs and market sizes are different between countries or regions, the pattern of foreign direct investment is efficient from the welfare point of view. As a policy creating the heterogeneity of firms, we focus on the artificially low interest rate policy. We demonstrate that it can improve economic welfare if the interest rate ceiling entails a rationing rule distributing funds to the export-oriented industries.