The paper is to present a theory consistent with the stylised facts that employment and wages in the manufacturing sectors of the developed nations decline. It focuses on a world of multinational corporations where capital and technology are increasingly mobil.

This paper examines the circumstances under which it is beneficial for small countries in a currency union to peg their currency to a large one (euro zone for example). For these purposes, we provide a three-country theoretical model extending the two-country model by Ricci (2008). The...

After matching a rich micro-level Iranian customs dataset with a macro-level cross-country database on Iranian diaspora stocks, we establish that diaspora matters for dynamics of Iranian exporters. We document the extent to which Iranian emigrants foster exports through both intensive and...

This paper analyzes, in a linear market with two adjacent countries, how firm location and optimal plant size depend on differences in the quality of infrastructures and income levels between countries. The study considers also how a free trade agreement may change, in this context where...

In this paper we analyze the main characteristic features of foreign direct investment (FDI) directed to Spanish manufacturing, both across industries and through time, for the years 1986-1992. During this period, Spain was one of the most important recipients of FDI inflows in the world,...

Where economic activity will locate in the future is one of the most important questions in economics. Even though advances in technology have reduced the cost of transport, communication and information gathering and processing, hence curtailing the ‘distance penalty’, local proximity...

This paper analyses the determinants of trade patterns between the CEECs and the OECD countries since the latter began their processes of transition and opening-up within the framework of the Association Agreements with the EU, with the ultimate aim of helping to anticipate the trade impact of...

This paper contains an empirical assessment of the growth effects of foreign direct investment (FDI) in European Union (EU) countries, when controlling for other growth determinants. Using data over the period 1980-1996, we obtained estimates of the growth effects of FDI for each country in...

This paper analyzes the macroeconomic effect of production relocation by using an open economy macroeconomic model. Our analysis shows, paradoxically, that acceleration in production relocation might have an expansive effect on the home economy. We also show that monetary expansion has...

This paper investigates the linkages between economic integration and horizontal Foreign Direct Investment (FDI) location. In a three-country partial equilibrium model with differentiated Cournot and Bertrand competition, we incorporate the two main FDI modes: Greenfield Investment (G.I.) and...