The decision over exports vs. foreign direct investment (FDI) is usually discussed in an extension of the so-called Melitz model where firms with heterogeneous costs compete in a monopolistically competitive industry. The present paper starts from a situation where a potential foreign entrant...

We consider a budget-constrained mechanism designer who selects an optimal set of projects to maximize her utility. A project's cost is private information and its value for the designer may vary. In this allocation problem, the selection of projects - both which and how many - is endogenously...