In oligopolistic industries, increased cost saving opportunities via offshoring have a moderating effect on trade unions. In order to discourage mobile firms from leaving the country, unions accept lower sector wages. In effect, the negotiated wage becomes independent of workers' bargaining...

This paper investigates whether the higher prevalence of South multinational enterprises (MNEs) in risky developing countries may be explained by the experience that they have acquired of poor institutional quality at home. We confirm the intuition provided by our analytical model by empirically...

We study how incentives for North-South technology transfers in multinational enterprises are affected by labour market institutions. If workers are collectively organised, incentives for technology transfers are partly governed by firms' desire to curb trade union power. This will affect not...

In 2005, Austria modified its group taxation regime and now provides an option for crossborder loss-offset. We analyse the combined impact of Austria's new group taxation and lossoffset limitations on cross-border investment decisions of domestic corporations. Monte Carlo simulations in an...

Recent empirical studies find that foreign direct investment (FDI) by a multinational firm is not associated with a reduction of the firm's domestic activities. As it is often argued, this finding may imply that a country should not tax the firm's foreign profit income since this reduces foreign...

This paper considers the effect of acquisition FDI on the knowledge production function. We distinguish between acquisitions by MNEs from technologically leading countries and those behind the technological frontier. We show that both acquire similarly R&D intensive domestic firms, but there are...

We study a multinational enterprise's (MNE) choice of foreign direct investment (FDI) mode in a vertically related market with local input sourcing. We show that the vertical structure of the market and its features play a crucial role for the MNE's decision: backward linkages, enhanced upstream...