Foreign producer services can provide substantial benefits for domestic firms. We build on earlier monopolistic-competition models of intermediate producer services in this paper. Results show that: (1) while foreign services are partial-equilibrium substitutes for domestic skilled labour, they...

A growing body of evidence suggests that the close availability of diverse business services is important for economic growth. Producer services such as managerial and engineering consulting can provide specialized knowledge to help domestic firms develop at lower unit cost. But these...

Gains from knowledge transmission arising from the presence of foreign firms has received a good deal of empirical attention, but micro-foundations for this mechanism are weak . Here we focus on production by foreign experts who may train domestic unskilled workers who work with them. Gains from...