Monopolistic Competition, Intermediate goods and The Economic Effects of Foreign Capital Inflow in A Export-Processing Zone

• Main Authors: Chou, Chia-Sui, 周嘉穗
• Other Authors: Liang Wen-Jung
• Format: Others
• Language: zh-TW
• Published: 1996
• Online Access: http://ndltd.ncl.edu.tw/handle/81998179414150050933

碩士 === 淡江大學 === 產業經濟學系 === 84 === This dissertation aims to constructs a general-equilibrium model withthe assumption that the market of intermediate goods is monopolisticcompetition. The model explicitly incorporates an intermediategoods-producing sector in the analysis to examine the economic effect offoreign capital inflow in EPZs and to compare with other articles such asDin (1994), Hamada(1974), Liang&Mai(1989). The main conclusion of the dissertation is that if the intermediategoods is nontraded goods, then an increase in foreign capital inflow in EPZswill raise national income, provided that export-processing goods islabor-intensive relative to import-goods and the intensive level is veryhigh. This conclusion is also the same as Din (1994), but he gets this withan additional assumption that intermediate goods is relativecapital-intensive. But it is different from Hamada that he concludesnational income at domestic prices will remain the same after increase inforeign investments. Furthermore, if intermediate goods is nontraded goods, then an increasein foreign capital inflow in the EPZs will fall national income.We get thisconclusion Under these assumptions: first, export-processing goods isintermediate-input-intensive relative to import-goods and the intensivelevel is very high; second, the additional assumption that the ratio ofcapital input in intermediate-goods sector is low. This is different formHamada and Din dosen''t conclude this point. At last, we suggest that policy maker should choose relativelabor-intensive industry in EPZs if the intermediate goods is nontraded.This is different from Liang&Mai(1989).