Essays on Econometrics Modelling of the Determinants of FDIs Assignment

Tags: Volkswagen
Download full paperFile format: .doc, available for editing

The paper "Econometrics Modelling of the Determinants of FDIs" is a great example of an assignment on macro and microeconomics. Antidumping can be used to protect nascent industries from unfair competition from foreign sources, but at a certain point these industries must be developed enough to be competitive on their own, otherwise the antidumping starts to have negative impacts on other industries and consumers. A good example is the antidumping regulation of machine bearings in the US; due to political lobbying pressure from a small but aggressive industry association, the importation of machine bearings is subject to heavy tariffs and quota restrictions.

But the existing bearing industry is unable to produce adequate supplies at competitive costs for all the other industries that need them – auto manufacturers, and manufacturers of other kinds of equipment. Manufacturers have two choices: they can either import the more expensive foreign bearings to obtain sufficient supplies, and pass the added cost on to the consumer, or they can source bearings from purely domestic sources, which places a limit on how much of their own products they are able to produce.

This reduces the supply of manufactured products, which again drives up prices to consumers according to the basics of supply and demand. Another factor of antidumping is that it discourages product development or production efficiency because it removes competitive pressure. The interests who benefit from anti-dumping protection are not forced by competition to improve their products or lower costs, so their consumers are potentially faced with two problems: lower-quality products at higher prices. Unless the product is one that has a captive market, i.e. , is a necessity that a large number of consumers must buy regardless of the quality or cost (such as basic staple foods), demand for the product will decrease if low quality and high prices persist.

Demand for more expensive, higher-quality imported alternatives will probably increase, but only to a point; high prices limit the amount consumers can purchase. Thus, the antidumping beneficiaries only hurt their own interests, if antidumping protection is extended beyond its useful time period – the market they were trying to protect will almost always eventually contract.

Download full paperFile format: .doc, available for editing
Contact Us