On 6 July 2021, the APEC Study Centre Consortium (ASCC) was held online by APEC New Zealand. Prof. Travis Ng participated in the event with a presentation on “Some Economic Effects of Foreign Ownership Restrictions”.
The aim of having foreign ownership restrictions is to protect insiders/ local people. It is believed that foreigners’ participation gives a rise to the product prices and thus hurts the locals. By restricting outsiders/ foreigners to participate in a market, local people could pay less for what they want.
However, Prof. Travis Ng finds from his economic model that restricting foreigners does not necessarily help the locals as it is thought. For example, without foreign participation, even if the prices do not go up, the producers do not have incentive to keep the overall quality of their products, which in turns hurts the local consumers in other aspects.