This paper presents theoretical and empirical analyses of strategic responses to competition from low-cost countries (LCCs). Surveying 423 firms in the U.S. and Germany, we consider the nature of low-cost competition and strategic responses by advanced market incumbents. The theoretical...

We develop a method for identifying departures from relative factor price equality across regions that is valid under general assumptions about production, markets and factors. Application of this method to the United States reveals substantial and increasing deviations in relative skilled wages...