This study considers endogenous determination of domestic standards on products that cause negative consumption externalities in the presence of a preferential trade agreement (PTA) in a three-country world. In particular, we examine how a PTA affects the optimal levels of external tariffs and...

This paper sets up a model of trade, in which two countries with differing levels of technology specialize on the production of subsets of the global value chain. In the open economy equilibrium, the technologically backward country exports intermediates in exchange for imports of a homogeneous...

This paper explores the role of FDI-spillover prevention costs in the strategic choice for a MNE of a developed country such as Japan about whether it perform FDI to an emerging economy such as Russia and China and about a degree of FDI spillovers that it allows. After discussing the exogenous...

This paper claims that distance alone is a poor proxy for international transport costs in gravity equations. We develop a theoretical framework with a manufacturing and a transport sector, where the level of manufacturing exports determines the demand for transport. Above a certain threshold,...

This paper reconsiders the theoretical foundations of EU regional policy in economics. It begins with a discussion of the line of thought of its prevalent explanation in equilibrium economics which is focusing on market failures as its key underpinning and which is the major toolkit of...

The last one and a half centuries have witnessed dramatic changes in the world economy. The service (tertiary) sector, which at the beginning of the 20th century was of little importance relative to agriculture and manufacturing, has become the dominant sector today, accounting for 80% and more...