In this paper, we analyze the offshoring decision of firms whose production process is characterized by a particular sequence of steps. International cost differences vary non-monotonically along the production chain, and moving unfinished goods across borders incurs transport costs. We show...

We argue that different industrial ownership structures generate different incentives for firms to engage in FDI. A comparison is made between (partially) cooperative structures such as the Japanese and Korean systems and competitive structures such as U.S. firms. It is found that ownership...

Previous studies have shown that there are significant sunk entry costs in exporting. However, the empirical literature has not addressed whether these costs are global or country specific. In this paper, I show that both are present and estimate that country-specific costs are about three times...

The authors examine how U.S. multinational corporations (MNCs) and their Canadian affiliates responded to the substantial bilateral tariff reductions that occurred over the 1983-92 period. Using confidential firm-level data from the Bureau of Economic Analysis, they focus on the MNCs' allocation...

Trade weighting is a common method of aggregating trade frictions. It will understate changes in these costs when there are non<i>ad valorem</i> trade costs and quality differences. Newly traded goods enter at higher trade costs than previously traded ones. Lower import costs shift trade to lowquality...

The paper analyzes the labour market effects of globalization when foreign market entry is costly and risky. With flexible labour markets, a fall in foreign market entry cost tends to generate more income inequality, but not necessarily so, as more firms pay foreign entry cost. By contrast, when...

Should international trade agreements be extended to include negotiations over environmental policy? The answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries; our results suggest that they do. Previous...

International outsourcing to lower cost countries such as China and India can best be understood through the enrichment of trade models to include concepts from industrial organization and contract theory that explain the vertical organization of production. The combination of trade with the...

In this paper, we explore the linkages between export-market participation and productivity performance in Canadian manufacturing plants. We also examine differences in the relationship between exporting and productivity for foreign-controlled as opposed to domestic-controlled plants, and...