Abstract:

The local content requirements have a direct effect on the host country's market of middle-stage products and an indirect effect on foreign direct investment and mobility of free trade. Through a study of the model on influences of local content requirements upon the host country's increasing rate of per capita product, it is found that the local content requirements in an equilibrium level can facilitate economic growth positively. For a host country, the proper local requirement is a policy beneficial to economic developments.

Key words: local content requirement, host country, economic influence