| The main objective of this dissertation is to study effects of trade policy such as tariffs and subsidy, and foreign direct investments (FDIs) on the performance of domestic and global economies. The first two essays, Chapters 2 and 3, consider the endogenous growth model of North-South trade with quality ladders. The third essay, Chapter 4, studies effects of FDIs on international R & D spillovers.; In Chapter 1, we state the aims and scopes of this dissertation and review the related literature.; In Chapter 2, we analyze the steady state effect of tariff imposition in a dynamic general equilibrium model of North-South trade with scale invariant growth, developed by Segerstrom and Dinopoulos (2004). Assuming that each government uses tariff revenue to subsidize domestic R & D, we show that tariff imposition of the South leads to a higher imitation rate (in the South), faster technological change (or quality improvement) in the world, industry shift from the North to the South, and lower wage inequality between the North and the South.; In Chapter 3, we study steady state effects of FDIs and globalization in a dynamic general equilibrium model of North-South Trade with scale invariant growth. We define FDI as movement of production base from the North to the South by a northern firm. Here, the incentive of FDI decision is to lower production cost.; We define globalization as an increase in the southern population. Our numerical example shows that globalization leads to less copying of Northern products, a faster technological change, more industry shift from the North to the South through an increase in the number of multinational firms, and a larger wage inequality between the North and the South.; In Chapter 4, we test the effects FDI on total factor productivity using more recent and more extensive data set than in Lichtenberg and Potterie (2001). We distinguish two patterns of FDI, one is FDI from a developed country to another developed country and the other is FDI from a developed country to a developing country.; We summarize the results in Chapter 5. (Abstract shortened by UMI.)... |
