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vertical cooperation
Local Content Requirements, Vertical Cooperation, and Foreign Direct Investment
      
We examine the effects of an LCR in the context of potential FDI in upstream manufacturing by a foreign multinational and potential vertical cooperation between a host country's upstream and downstream producers.
      
In case of vertical cooperation domestic producers have an incentive to set the price of the intermediate strategically to discourage FDI.
      
Vertical cooperation is found to enhance the rent-shifting effect of the LCR, whereas the FDI response increases price competition and reduces domestic profits.
      
In the majority of cases there are also clear indications of vertical cooperation and networking.
      
On account of this, vertical cooperation between firms requires a great deal of coordination among them.
      
This new algorithm requires vertical cooperation between the network layer and the overlay.
      
This type of upgrading may also be referred to as vertical cooperation.
      
 

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