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...

1 Introduction -- 1.1 Introduction -- 1.2 Least Cost Theory -- 1.3 Central Place and Interdependence Theories -- 1.4 Other Approaches -- 1.5 Conclusion -- 2 Objectives of the Study -- 2.1 Introduction -- 2.2 Description of the Theoretical Model -- 2.3 Comparison with Planning Models -- 2.4...