This volume was prepared by Sebastian Benz while he was working at the Ifo Institute. It was completed in December 2013 and accepted as a doctoral thesis by the Department of Economics at the University of Munich. It includes five self-contained chapters. All chapters discuss different...

Multinational firms transfer to their foreign affiliates superior technology, leading to higher productivity of their workers and therefore to higher wages, or so the often cited rent-sharing theory of multinational firms explains. But studies have shown that oftentimes, this results not from...

I analyse firms organisational choices when they face uncertainty about institutional conditions in foreign locations with heterogeneous final good producers and incomplete contracts. As firms learn about the conditions abroad, the increasing offshoring activity increases competition in the...

This paper provides evidence that labor reallocation from the manufacturing into the non-manufacturing sector causes an increase in sorting of high-skilled (low-skilled) workers into high-paying (low-paying) firms and thereby triggers a rise in wage inequality. I use data on 50% of all West...

In most industrialized countries, employment has grown predominately in jobs at the upper and lower tails of the wage distribution, while employment in the middle part of the distribution has stagnated or declined. This process of job polarization is well documented for a number of countries. We...

This paper considers the "share-altering" technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb-Douglas production function, our model shows that the implementation of skill-biased technologies requires a...

We develop a quantitative framework in which income inequality arises endogenously in response to productivity shocks. The framework accommodates sectoral inputoutput linkages, arbitrary elasticities of factors and intermediates, and heterogeneous workers that endogenously choose to supply their...

This paper studies the implications of (endogenously) directed technical change for the design of non-linear labor income taxes in a Mirrleesian economy augmented to include endogenous technology development and adoption choices by firms. First, I identify conditions under which any progressive...

The focus of our contribution is to shed light on the importance of firm agglomerations and FDI as drivers of firm survival in Italy. We focus upon different types of agglomeration economies related to the geographical context checking how these economies impact differently on heterogeneous...

We propose a theoretical framework to analyze the offshoring and reshoring decisions of firms in the age of automation. Our theory suggests that increasing productivity in automation leads to a relocation of previously offshored production back to the home economy but without improving...