We examine interaction between goods trade and market power in domestic trade and distribution sectors. Theory suggests a linkage between service-sector competition and goods trade, one supported by econometrics involving imports of 22 OECD countries vis-à-vis 69 exporters. This points to...

This paper analyzes the effects of a potential spillover on technology transfer of a multinational enterprise and on the host country policy. In particular, we examine how both parties’ incentives can be controlled through the ownership structure in an international joint venture. In contrast...

This Paper studies cross-border acquisitions and greenfield entry in a multi-firm setting. Acquisition entry is more likely when the acquirer gains a strong position in the product market, relative to greenfield entrants. We also show that such acquisitions might have a low profitability,...

This paper studies how the surplus generated by the globalization process is divided between MNEs and owners of domestic assets. We construct an oligopoly model where the equilibrium acquisition pattern, the acquisition price and firms' greenfield investments are endogenously determined....

The Paper investigates how foreign-owned and domestic firms in Hungary set their export prices. Using a unique dataset with firm and product-level data on trade flows, we find that foreign firms charge substantially lower export prices than domestic firms. This finding is robust after...

We construct a model in which oligopolistic firms decide where to locate. Firms choose to locate either in a country where employment protection implies costly output adjustments or in one without adjustment costs. Using a two-period three-stage game with uncertainty it is demonstrated that...

Mergers and acquisitions (M&A) is the dominant form of Foreign Direct Investment (FDI), but has received only scarce attention in the theory literature on trade and investment. This paper highlights how the international pattern of ownership of productive assets may depend on features of trade...

In this paper, we adopt the vertical differentiation duopoly framework to give a full description of firms’ relocation decisions, when the removal either of trade barriers or of restrictions on capital outflows/inflows (‘globalization’) allows them to serve the domestic market through...

This paper presents a simple model of the interaction between two firms, based in different countries, each of which faces the export v MNE choice concerning the serving of each other’s home market. The basic game structure is similar to that elsewhere in the literature (Horstmann & Markusen...

This Paper estimates econometric models explaining the foreign production of leading UK firms in 1986 and 1993. The principle questions addressed are: (i) what effect does one UK firm’s foreign operations have on the foreign operations of another UK firm?; (ii) what effects do the UK...