In many industrialised economies, there is growing concern about the relocation of economic activities abroad. This paper analyses whether this concern is justified. The authors show that theory predicts ambiguous effects of relocation on (the employment and production levels of) the country of...

Despite the reduction in trade barriers which has followed successive GATT agreements, national governments still affect trade flows by using instruments such as quantitative restrictions to imports, antidumping actions, state subsidies, preferential procurement policies, and definitions of...