We examine the effects of foreign aid in a small recipient country with two traded goods, one non-traded good, and two factors. Learning by doing and intersectoral knowledge spillovers contribute to endogenous growth. We obtain two main results. First, a permanent increase in untied aid raises...

Suppose that governments care about their tax revenue and local firms have some say in environmental regulations. Then, the level of employment and environmental compliance may be negotiated. We find that firms located in different countries can improve their threat-point payoffs by mutual...

In this paper, transfer pricing and its relation with the determination of wages and employment when a subsidiary of the multinational corporation (MNC) is located in a unionized labor market are studied. The author's results suggest that the union prefers to negotiate with headquarters rather...