In this article we provide a theoretical analysis of the possible impact of trade and fragmentation on the skilled--unskilled wage gap in a small developing economy. In particular, we illustrate the possibility of a decline in the relative wage of the unskilled labor following an improvement in...

We construct a general equilibrium model with a protected intermediate sector and analyze the effectiveness of trade reform for a small open economy where bureaucratic corruption arises because of trade protection. Intermediaries are employed by the producers in order to avoid paying the import...

We construct a tractable model of an oligopolistic industry that allows us to capture the role of the vertical structure in the incentives for and implications of cross-border horizontal mergers. We show that vertical integration can increase the gains from cross-border mergers. We also...

We consider social efficiency of firm-entry in the presence of foreign competition. If the labour markets are competitive, entry is insufficient for the domestic country if the transportation cost is low and the marginal costs of the domestic firms are sufficiently higher than the marginal cost...

We propose a two-country growth model of intermediate business-services trade that captures the role of time zone differences. It is shown that a time-saving improvement in intermediate business-services trade involving production in different time zones can have a permanent impact on productivity.