We argue, in a model with trade and unemployment, that exogenous inflow of foreign capital may deliver the desired result when it flows to a protected intermediate-goods sector. Whether foreign investment should be directed towards an intermediate-goods sector or to a final-goods sector depends...

We show that international outsourcing and R&D by the outsourced firm may be either substitutes or complements. Outsourcing increases the R&D investment in small markets and in highly competitive product markets, whereas it decreases the R&D investment in large markets. If the outsourced firm...

Technology transfer to the developing nations has been predominantly characterized by technology collaborations between the multinationals and the local firms of these developing countries. When a multinational offers a new technology to a local firm, the firms may have different perceptions...

For currencies with highly developed forward markets a well-known separation theorem holds which implies that international firms fully hedge the exchange rate risk if the forward markets are unbiased. In this paper we present a model of a risk-averse firm when perfect hedging instruments are...

In this paper we study the impact of more transparency in the foreign exchange market on the <i>ex ante</i> expected volume of international trade. Transparency is measured by the informational content of publicly observable signals. These signals convey information about the use of policy instruments...