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We analyze a two-country model of Foreign Direct Investment (FDI). Two firms, each of which is originally situated in only one of the two countries, first decide whether to build a plant in the foreign country. Then, they decide whether to relocate R&D activities. Finally, they engage in...
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firms' export performance. Drawing on Porter hypothesis and firm heterogeneity theory, we adopt a structural model where …
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China. We also find that corruption strongly reduces tax revenue. Looking at things from an expenditure point of view we … observe that corruption significantly decreases government spending on education, R&D and public health in China. We also … that the pollution haven hypothesis may not hold in China. This finding sheds a new light on the “China puzzle” that China …
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