We present a model, in which a small industrialised economy outsources part of its production into a small foreign country which is well endowed with low-skilled labour. We analyse under which conditions sinking trade costs stimulate outsourcing activities, thereby increasing the wage dispersion...

The envisaged EU enlargement will lead to a redirection of Structural and Cohesion Funds expenditures from current to new EUmembers. This redistribution of funds makes the accession countries even more attractive as a location of FDI. Using a logistic regressions approach, this paper shows that...

This paper provides a theory of incorporation and taxation that emphasizes the role of the corporate legal form in facilitating access to external capital and the potential advantages of limited liability. Incorporation relaxes financing constraints and makes corporations larger than comparable...