This paper gives a new answer to the old question of whether international trade and capital flows are substitutes or complements. In contrast to conventional intuition, we show that when Heckscher-Ohlin trade takes place in high-skill and low-skill intensive goods, this does create incentives...

This paper empirically examines the heterogeneity in the effects of multiple dimensions of distance on trade across detailed product groups. Using finite mixture modelling on bilateral trade data at the 3-digit SITC level, we endogenously group product categories into an, a priori unknown,...

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...

Combining administrative data on German workers with commercial data on German producers, we find evidence that German subsidiaries of foreign multinationals, while paying a premium relative to other local producers, offer wages of similar size as German subsidiaries of German multinationals....

After nearly a decade of profound economic changes and a market transformation, the countries in Central and Eastern Europe now face the challenge of development and sustainable growth. The development priorities include achieving a high income growth for their economies by raising investment...

This paper examines the long-run effect of the level of foreign direct investment (FDI) on the level of total factor productivity (TFP) for 70 developing countries for the period 1981-2011 using panel cointegration techniques. It is found that (i) FDI has, on average, a negative long-run effect...

We raise the hypothesis that aid specifically targeted at economic infrastructure helps developing countries attract higher FDI inflows through improving their endowment with infrastructure in transportation, communication, energy and finance. By performing 3SLS estimations we explicitly account...

Since the mid-1990s, countries offering tax systems that facilitate international tax avoidance and evasion have been facing growing political pressure to comply with the internationally agreed standards of exchange of tax information. Using data of German investments in tax havens, we find...

This paper analyzes the determinants of people s attitudes towards FDI using a survey-based data set that covers a wide range of rich and poor countries. We find that both individual socioeconomic characteristics and macroeconomic factors shape agents attitudes towards multinational firms....

We estimate a gravity model for bilateral FDI out-stocks from panel data for OECD reporting countries with bilateral and year fixed effects. With this demanding test, we find a robust positive effect of bilateral immigrants on bilateral FDI - provided that residents of the two countries have few...