Altomonte, Carlo; Bonassi, Chiara - KITeS, Centre for Knowledge, Internationalization and … - 2004
We investigate the trade-off between FDI and international outsourcing of interme-diate inputs by a producer of a final good. To this extent, we characterize an industry equilibrium where fixed sunk costs exist for the setting up of foreign subsidiaries and the latter are heterogeneous in...