New developments in the world economy have triggered research designed to better understand the changes in trade and investment patterns, and the reorganization of production across national borders. Although traditional trade theory has much to offer in explaining parts of this puzzle, other...

This paper studies the life-cycle dynamics of exporters and multinational enterprises (MNEs). We present a dynamic model of trade and MNE activity in which the mode of serving a market depends on the well-known proximity-concentration tradeoff. We show that the option of performing MNE...

This paper considers the role learning has on foreign direct investments (FDI) when there is both cost and demand uncertainty. FDI has an obvious benefit as it gains the firm information about local demand and costs. However, FDI has a second effect: it correlates the firm's cost with the local...

This paper examines the impact of uncertainty about economic policy on US exports, imports, and direct foreign investment inflows. Uncertainty over domestic and international economic policy adversely affects the international ow of goods, services, and investment. When sunk costs are associated...

We construct a partial equilibrium model of intra-industry cross-hauling DFI with unionized duopoly, where wages and employment are determined through Nash bargaining between firms and national labor unions. We show that under symmetry, cross-hauling DFI is the unique Nash equilibrium, in which...

We develop a model of export-platform foreign direct investment (FDI) in which final goods are produced only with labor and there are no fixed costs of exporting. We derive a simple condition that determines whether an MNE's plants are substitutes or complements. This condition is shaped by the...

We study the determinants of the extent of outsourcing and of direct foreign investment in an industry in which producers need specialized components. Potential suppliers must make a relationship-specific investment in order to serve each prospective customer. Such investments are governed by...

The effect of labour costs on industry profits, employment and labour income is at the heart of the current European debate on industry competitiveness. High wages paid in European countries such as Germany are generally considered harmful for industry profitability. Though, high wages appear...

Today’s global world is characterized not only by a high volume ofinternational trade and foreign investment relativeto national income, but also by a changed composition of that tradetowards a greater fraction of trade in inputs andcapital goods and outsourcing of production.. Emphasized is...

In this paper, we provide an overview of the relationship between international migration and international trade as well as capital movements. After taking a brief historical perspective, we first investigate migration flows between two countries in a static, neoclassical context. We allow for...