Most international commerce is carried out by multinational firms, which use their foreign affiliates for the majority of their foreign sales. In this paper, I examine the determinants of multinational firms' location and production decisions and the welfare implications of multinational...

Processing trade in China has been prevalent, despite rapid economic growth and consequent structural changes. This study examines the role of the processing trade, especially as it relates to exports productivity and export variety. Our model predicts that high productivity of processing...