We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm-specific features play a crucial role for the link between employment protection and relocation. Stricter employment protection laws over time in the...

A partial equilibrium model is used to examine the international production allocation of a two-plant multinational firm that is confronted with uncertainty with respect to foreign sales. The firm produces identical products in both plants, using firm-specific factors. The internationally...