This paper examines the impact of the emergence of regional blocs (customs unions) on the patterns of inter-bloc and intra-bloc trade when firms have the option to engage in direct investment (FDI). The consequences of bloc formation for exogenously given external tariffs is examined first. When...

This paper studies the implications of various contracting alternatives between exporting and importing firms on the value of production and international transactions. Since contracts are usually determined when exchange rate is uncertain, we show that under some conditions renegotiating these...

This paper studies the implications of various contracting alternatives between exporting and importing firms on the value of production and international transactions. Since contracts are usually determined when exchange rate is uncertain, we show that under some conditions renegotiating these...