The theoretical prediction of Head and Ries (‘Heterogeneity and the FDI versus export decision of Japanese manufacturers', 2003, Journal of the Japanese and International Economies, 17: 448-67) is that if the foreign plant is not used to serve the home market, the exporters can be more...

Assuming linear demand and unit transportation cost, Head and Ries (2003, 'Heterogeneity and the FDI versus export decision of Japanese manufacturers', Journal of the Japanese and International Economies) conclude that the theoretical prediction of Helpman et al. (2004, 'Export versus FDI with...

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...

This paper considers welfare effects of entry when the incumbent firm behaves like a Stackelberg leader in the product market. In contrast to the existing literature, we show that entry may increase welfare for any cost asymmetries between the firms. Using a general demand function we show the...

We show that the relationship between higher productivity of the foreign firm and host country welfare depends on the reason for foreign direct investment (FDI). If the reason for FDI is to get the advantage of cheap labor, higher productivity of the foreign firm may reduce host-country welfare....

We show that if patent protection and trade secrecy generate asymmetric market structure, an innovator may prefer patent protection than trade secrecy even if the diffusion probability is higher under the former but it increases market concentration by preventing some imitators. So, whether an...

Empirical evidences show that technology licensing contracts differ significantly and may consist of only up-front fixed-fee, only output royalty or the combinations of fixed-fee and output royalty. We explain these possibilities under international technology transfer. The trade-off between the...

Common wisdom suggests that firms with higher productivities earn higher profits and the higher productivities of the firms benefit consumers by increasing outputs. We show that productivity difference may not matter for outputs and profits in presence of wage bill maximizing labor unions. Our...

We show a new way through which patent protection affects innovation. We show that patent protection may reduce the final goods producers' incentives for innovation in industries with imperfectly competitive input markets. The input market structure may play an important role in this respect.

We consider the welfare effect of cross-border merger in presence of international R&D competition. Cross-border merger increases domestic welfare if the bargaining power of the foreign firm and the slope of the marginal cost of R&D are sufficiently low. Otherwise, domestic welfare is lower...