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This paper proposes a model in which the removal of barriers to trade and factor mobility is associated with endogenous fragmentation of the value-added-chain. Fragmentation is the outcome of cost competition - the profit-maximizing choice of cost structure by monopolistically competitive firms....
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In times of increasing oil prices and a weak dollar, European companies that focus their business on the US market may find themselves in a weak position. While many businesses can hedge this kind of risk by relocating production to the US, or employing financial remedies, these strategies may...
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slotting fees may emerge as a result of a rent-shifting mechanism when consumer shopping costs are taken into account. If … consumers economize on their shopping costs by bundling their purchases, their buying decision depends rather on the price for … retail outlet. If the complementarity effect resulting from shopping costs dominates the original substitution effect, the …
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