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We explore how the competitive pressure of imports affects productivity, at the firm level. There are two conflicting … effects of import-competition: the pro-competitive effect fosters productivity, while the direct effect hinders it. The pro … productivity gap, the firm shuts down. Here, a temporary tariff sways the firm to fight, and ensures survival, which is welfare …
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This paper studies the importance of incentives as a determinant of international trade flows. We argue that barter, countertrade and foreign direct investment can be seen as efficient institutions that mitigate contractual hazards which arise in technology trade, marketing and imperfect capital...
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In oligopolistic industries that are unionised and may be affected by offshoring, falling offshoring costs have a moderating effect on trade unions. They will accept lower sector wages in order to discourage mobile forms from leaving the country. Since such wages are independent of the workers'...
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This paper shows the strategic aspects of international outsourcing in an oligopolistic market, if outsourcing is attractive because of fixed cost savings. We show that outsourcing decisions are strategic substitutes. Furthermore, we demonstrate that due to decreasing individual output,...
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