We consider two channels via which foreign inputs into industrial production may lead to productivity effects. The first one concerns dynamic externalities between firms which share technical and organizational knowledge which is vital for the productivity growth of a particular industry. We...

We analyze tax competition between two countries of unequal size trying to attract a foreign-owned monopolist. When regional governments have only a lump-sum profit tax (subsidy) at their disposal, but face exogenous and identical transport costs for imports, then both countries will always...