Foreign Direct Investment (FDI) is not only a transfer of capital, but a complex bundle of capital and firm-specific assets like production and management know-how. In particular, the transfer of production know-how improves overall productivity of FDI-receiving firms and to some extent also...

Foreign Direct Investment (FDI) is not only a transfer of capital, but a complex bundle of capital and firm-specific assets like production and management know-how. In particular, the transfer of production know-how improves overall productivity of FDI-receiving firms and to some extent also...

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 implements a panel data approach for studying the determinants of and relationships between bilateral economic activities in terms of both trade and foreign direct investment between the EU member states. The familiar equation for testing the determinants of bilateral exports is...

This paper analyzes the effects of distance as a common determinant of exports and FDI in a three factors New Trade Theory model assuming that distance affects both pure trade costs and plant set-up costs. Exports and FDI are not necessarily substitutes with respect to distance since the...

Trade economists have for long considered gravity models to estimate unexhausted potentials for bilateral trade. Similar to the discrepancy between "normal" and "actual" bilateral trade, one may ask the question about the difference between "normal" and actual bilateral multinational activity....

This chapter provides a survey of issues which emerge with the taxation of multinational enterprises. It addresses tax rates which affect multinational firms directly and focuses on provisions and incentives which relate to the profits and investments of such firms directly. It survey positive...