I present a model of international trade and foreign direct investment (FDI), where FDI is comprised of greenfield FDI and mergers and acquisitions (M&A). Working in a monopolistically competitive environment, merging firms do not reduce competition. Mergers are motivated by efficiency gains and...

We use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolitic-competition model of the materials sourcing decisions of heterogeneous...

The paper analyses sectoral patterns of intra-Asian trade for selected Asian countries as well as for sub-regions within Asia. Beyond a general trend towards manufactures, it reveals remarkable differences in specialisation profiles between lagging South Asian countries still concentrating on...

Theoretical considerations suggest that the option of waiting under conditions of uncertainty affects the relative importance of firm-level productivity and distance-related transaction costs as driving forces of FDI. Yet the timing of FDI has received little attention in the empirical...

In the presence of increasing specialization of workers it becomes more and more difficult for firms to find the most suitable workers. In such an environment a multinational corporation has an advantage because it can exchange workers between plants in different countries. In this way it can...

This paper uses micro-data from the World Bank Investment Climate Surveys 2002-2006 to investigate how foreign ownership and access to external finance affect the likelihood of manufacturers in emerging markets to export and/or import. Applying propensity score matching to control for...

The paper develops a simple theoretical model of inventory control in global supply chains. It identifies a role for intermediaries in managing inventory, and shows that inserting an intermediary as an additional link in a supply chain is profitable when demand volatility is high. It also...

This paper uses micro-data from the World Bank Enterprise Surveys 2002-2006 to investigate how foreign ownership affects the likelihood of manufacturers in developing countries to export and/or import. Applying propensity score matching to control for differences across firms in terms of labor...

We consider two channels via which foreign inputs into industrial production may lead to productivity effects. The first one concerns dynamic externalities between firms which share technical and organizational knowledge which is vital for the productivity growth of a particular industry. We...

This paper discusses environmental policies in response to foreign direct investment (FDI) in a symmetrie two-country setting, where firms' behavior affects government policy decisions. We show that two alternative equilibria with FDI are possible: (i) one with unilateral FDI, where one firm is...