We study the determinants of the extent of outsourcing and of direct foreign investment in an industry in which producers need specialized components. Potential suppliers must make a relationship-specific investment in order to serve each prospective customer. Such investments are governed by...

What is the impact of Chinese import competition on Nordic producer prices? In a panel covering 23 (2 digit) NACE manufacturing sectors from 1995 to 2008, instrumental variable estimations predict that when Chinese imports capture a 1% increase in market share, Nordic producer prices decrease by...

The paper analyses intra-industry trade between economies containing an imperfectly competitive industry in which firms produce a homogeneous output, production is subject to increasing returns to scale, and there is free entry and exit of firms. Trade is shown to unambiguously increase welfare...

A simple model of offshoring, which depicts offshoring as ‘shadow migration,’ permits straightforward derivation of necessary and sufficient conditions for the effects on wages, prices, production and trade. We show that offshoring requires modification of the four classic international...

The share of intra-industry trade (IIT) in total trade between Central and East European nations and the EU is among the highest of all the EU’s bilateral trade flows. IIT is broken down into horizontal and vertical components and the determinants of each is investigated. Vertical IIT...

Analysing data on values and unit values of bilateral trade flows at a very detailed level (some 10,000 product items), we examine the nature of intra-EC trade over the period 1980-94, identify its general determinants and then estimate the specific impact of the Single European Market...

This paper reviews the scientific contributions of Paul Krugman to the study of international trade, on the occasion of his receipt of the 2008 Nobel Memorial Prize in Economics. A simplified exposition is presented of some of his principal findings, including: the effects of trade on firm scale...

We study the determinants of the location of sub-contracted activity in a general equilibrium model of outsourcing and trade. We model outsourcing as an activity that requires search for a partner and relationship-specific investments that are governed by incomplete contracts. The extent of...

A large share of world trade, especially among the OECD countries, is two-way trade within industries, so-called intra-industry trade (IIT). Despite this, few attempts have been made to examine why countries export some products within industries, whereas they import others. We examine this...

We depart from the trade and wages literature and its emphasis on North-South trade, examining North-North trade and linkages between trade-based integration and relative wages in an Etiher-type division of labor model. Using this model we identify a formal relationship between international...