The issue of economic governance is highly discussed pertaining to the question of industrialisation of a country, yet the literature on international trade and foreign direct investment (FDI) hardly pays attention to this aspect. We show that higher investment in economic governance attracts...

We provide a theoretical justification for bi-sourcing, which refers to the situation where a final goods producer buys an input from an outside supplier and also produces it in-house. Bi-sourcing occurs if the marginal cost of producing the input in-house is higher than the marginal cost of...

We consider strategic government policies on the exports of final goods and on the input production when the inputs are non-tradable and produced by the foreign firms. If the policies consist of only per-unit tax/subsidies either on the final goods or on the inputs, it is optimal for the...

Significant amount of vertical technology transfer occurs between developed and developing country firms, yet the literature on intellectual property rights did not pay much attention to this aspect. We show that whether or not the incumbent and the entrant final goods producers are from the...

Considering Cournot competition, this note shows that, if the firms differ in labor productivities, the equilibrium wage rates under a centralized labor union are not independent of the number of firms and product differentiation if the labor union charges a uniform wage rate. However, if the...

We show the incentive for divisionalization by a monopolist producer. In contrast to the previous literature, where divisionalization occurs for product market advantage, we show that divisionalization occurs if it provides strategic advantage in the labor market. With unionized labor market, we...

In a successive Cournot oligopoly, we show the welfare effects of entry in the final goods market with no scale economies but with cost difference between the firms. If the input market is very concentrated, entry in the final goods market always increases welfare. If the input market is...

Common wisdom suggests that entry reduces profits of the incumbent firms. On the contrary, we show that if the incumbents differ in marginal costs and the entrants behave like Stackelberg followers, entry may benefit the incumbents who are relatively cost efficient while it always hurts the cost...

Whether higher productivity of the foreign firm increases host country welfare depends on whether the reason for foreign direct investment (FDI) is to save the trade cost or to get the advantage of cheap labor. We show that, if the reason for FDI is to get the advantage of cheap labor, higher...

We generalize the analyses of Hazledine (2006, “Price discrimination in Cournot-Nash oligopoly”, Economics Letters) and Kutlu (2009, “Price discrimination in Stackelberg competition”, Journal of Industrial Economics) with asymmetric cost firms. We show that the main result of Hazledine,...