Cost harmonization is said to occur when foreign firms' marginal costs are brought closer or equalized to domestic firms' costs. It can occur for various reasons, ranging from foreign direct investment to falling transport cost and policy changes in the foreign country. In this paper we derive...

In this paper we empirically investigate the factors determining the durations of research joint ventures (RJVs). Our theoretical model predicts that greater innovation values allow the partners to cooperate in R&D for longer durations. We test this hypothesis using data from the European Eureka...

We examine a firm's choice between exporting and foreign direct investment (FDI) under demand and cost uncertainty. FDI enables the foreign firm to meet shifting local demand more quickly, increasing profit. However, FDI means using local inputs, so when the foreign firm competes with the local...

We study the effect of contingency trade policy in a multicountry oligopoly model with and without R&D opportunities. We show that firms benefit from unilateral protection but initiate antidumping (AD) only against the targets domiciled in substantially smaller countries. Also, AD filings are...

With the America Invents Act of 2011, the U.S. changed its patent-issuing rule from first-to-invent to first-to-file, the international norm. We investigate the effect of such a policy change in a two-country model of R&D competition for two sequential (basic and final) inventions. We find that...

This paper examines the optimal entry policy towards oligopoly in a globalized world. In an open economy free entry is socially suboptimal, but corrective tax policy to curb entry proves insucient unless internationally harmonized. Thus, while conferring the gains from trade, globalization...

Cooperation among opportunistic agents often breaks down when agents cannot observe one another's actions. The standard remedy for such a problem is a two-mode approach pioneered by Green and Porter (1984), where agents switch back and forth between cooperation and punishment mode. Here, I...

One impetus for reform of the health care system in the United States is that in the U.S. more is spent on medical care than in other countries, with no noticeable difference in results. It is commonly thought that this is a result of a defect in the organization of medicine in the U.S. which...

Foreign direct investment (FDI) gives foreign firms access to local labor and inputs, thereby harmonizing costs between foreign and domestic firms relative to exports. This paper investigates the welfare effects of such cost harmonization in strategic environments, finding that when the number...

While the rest of the world issues patents to those who file applications first the U.S. do so to those who can demonstrate to have made inventions first. The U.S. has recently been under pressure to conform to the international rule. In this paper I examine the effect of international...