This paper examines the effect of Wal-Mart's entry into Mexico on Mexican manufacturers of consumer goods. Guided by firm interviews that suggested substantial heterogeneity across firms in how they responded to Wal-Mart's entry, we develop a dynamic industry model in which firms decide whether...

Models dealing with cross-border acquisitions versus greenfield investment usually assume that the entry of a foreign firm into a market has effects on the outputs of all domestic firms in that market, but exit or entry of local firms is not considered. The purpose of this paper is to re-examine...

We develop a tractable, two-country, overlapping-generations model and show that cross-country differences in financial development can explain three recent empirical patterns of international capital flows: Financial capital flows from relatively poor to relatively rich countries while foreign...

Using a unique firm-level dataset this study shows that, contrary to the hopes of transition economies, foreign investors in the region are characterized by low, rather than high, R&D intensity. The results also indicate that investors with higher R&D spending are more likely to engage in...

This Paper investigates whether the acquisition of a domestic establishment by a foreign owner has any effects, positive or negative, on the survival prospects and employment growth of that plant. The empirical analysis uses data from the Annual Respondents Database (ARD) for the UK electronics...

This paper simulates the costs of the US-Japan auto VER. Under a standard constant returns to scale (CRTS) formulation, the costs are estimated at about $10 billion. It then sequentially introduces important features of the auto VER: endogenous rent premium determination, wage distortions in...

In this Paper we aim to examine the regional impact of foreign-owned establishments on the performance of domestic establishments in the electronics industry in the UK. We use establishment-level data taken from the UK Census of Production (the ARD) to this end. In the econometric specification,...

This Paper examines the importance of agglomeration economies and institutions vis-à-vis initial conditions and factor endowments in explaining the locational choice of foreign investors. Using a unique panel data set for 25 transition economies between 1990-98, we find that the main...

Using a panel dataset containing information on FDI flows from market to transition economies, we establish the determinants of FDI inflows to Central and Eastern Europe: country risk, unit labour costs, host market size and gravity factors. In turn, we find country risk to be influenced by...

This Paper studies the determinants of location choice by foreign investors in France. A new sample of almost 4000 location choices over ten years and 92 administrative locations is used to measure two important issues: To what extent do foreign investors cluster spatially and are the...