A two factor general equilibrium model with perfect international capital mobility, endogenous supply of capital and labour, and heterogeneous individuals, is used to analyze the relation between taxes and capital income and labour income, and the efficiency of free capital mobility.

We present a model of the TV-advertising market that encompasses both the product markets and the market for TV programs. We argue that the TV industry has several idiosyncratic characteristics that need to be modeled, and show that the strategic interaction in this industry differs from other...

We study the choice of an MNE in deciding whether to establish a branch plant within a region, explicitly taking into account exit, as well as entry, costs. Protecting workers by having stict lay-off rules deters potential investment while subsidies attract it.

In the last two decades we have witnessed a rapid increase in foreign direct investment (FDI). Simultaneously, there has been a process of economic integration between countries, bringing down costs of trade. At first sight, the increased importance of FDI seems paradoxical; we would expect...

We examine the economic justification for providing investment subsidies to foreign-owned multinationals. These provide employment opportunities and generate demand for domestic intermediate inputs, produced by domestic workers with increasing returns to scale. Offering subsidies to...