| Summary: | 碩士 === 國立暨南國際大學 === 經濟學系 === 92 === The paper investigates the pattern of investment when there is an efficiency loss in outward investment. Other important features in this model include international vertical fragmentation in production, coexistence of old and new technology, cross-country cost differential, and heterogeneity of firms. We derive conditions for various patterns of investment in a regional economy with two countries. We also add government regulation of exporting new technology into the model and derive the effect of the regulation on the numbers of firms, the pattern of investment, and the profits of firms in the intermediate-good sector and the final-good sector. In general, we find that the regulation is not good for the home country in terms of the aggregate profit, however, it raises the profit of firms in the host country.
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