This paper examines, both theoretically and empirically, how the presence of FDI affects product quality of domestic firms through worker mobility. Heterogeneous firms are faced with a monopolistically competitive product market and labour markets of production workers and quality control...

Using a simple theoretical model, this paper argues that an increase in foreign presence, which refers to the level of foreign investment in a given domestic firm, can affect the leverage of domestic firms. We apply the model to explore the link between foreign presence and leverage with...

Rapid globalization has resulted in increased competitive pressures. The entry of foreign firms in a host economy increases the level of competition faced by not only the domestic firms but also the existing foreign firms. We argue that domestic firms, especially in developing countries, respond...