We show that the static duopoly model in which firms choose between exporting and foreign direct investment is often a prisoners' dilemma game in which a switch from exporting to foreign direct investment reduces profits. By contrast, we show that when the game is repeated there is a range of...

Intra-industrielle Direktinvestitionen oder die daraus finanzierte Produktion sind Formen des internationalen wirtschaftlichen Engagements, die ihre Begründung sowohl im intra-industriellen Handel als auch in der inter-industriellen Produktion finden. Dies wird an Hand einer Taxonomie...

We analyze how product differentiation influences firms' choice between exporting and foreign direct investment. When product specifications are determined endogenously, we show that there is no symmetric solution to the product specification subgame. The cost disadvantage of an exporting firm...