Abstract

The work looks at the impact of discriminatory tariff changes of a non-reciprocal character on the locational choices of multinational enterprises. The author offers an analytical framework within which the implications of non-reciprocal tariff preferences on the locational strategies of multinational enterprises are directly derived from the theory of economic integration and preferential trading. Then, the pattern of foreign direct investment in the counties that are recipients of EC tariff preferences is looked at, providing support for the the author’s hypothesis.

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