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The decision over exports vs. foreign direct investment (FDI) is usually discussed in an extension of the so … starts from a situation where a potential foreign entrant would be just indifferent between exports and FDI in such a setting … strategic impact of lower marginal cost makes FDI more attractive in a Cournot setting while exports are preferable under price …
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investment or trade under complete liberalization) which increases local welfare by more than both the case without foreign …
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