How important to welfare and growth in developing countries are restraints on foreign providers of producer services? Limiting such services not only may limit growth but may hurt some of the very people - domestic skilled workers in such service sectors - those restraints are designed to protect.Domestic service aquot;varietiesaquot; are produced with increasing returns, imperfect competition, and sell for a price in excess of marginal cost. A tax on ... This effect shows up in models Of differentiated final goods and leads to a positive optimal tax.
|Title||:||Foreign Direct Investment in Services and the Domestic Market for Expertise|
|Author||:||James R. Markusen, David G. Tarr, Thomas Fox Rutherford|
|Publisher||:||World Bank Publications - 2000|