We develop a general equilibrium model with heterogeneous firms and foreign direct investment cost uncertainty and investigate the survival of foreign-owned firms. The survival probabilities of foreign-owned firms depend on firm-level characteristics, such as productivity, and host country...

This paper tests industry-specific hypotheses of the determinants of intraindustry trade in the context of Australia-U.K. trade. In doing so, it separates intraindustry trade (IIT) into IIT in horizontally differentiated products and IIT in vertically differentiated products. It finds that the...

Recently a number of commentators have argued that trade policy in developing countries should be deployed discriminatorily to encourage the expansion of trade among southern countries. Such a strategy is seen as being central in the framing of a new international economic order. This article...

Governments the world over offer significant inducements to attract investment, motivated by the expectation of spillover benefits to augment the primary benefits of a boost to national income from new investment. There are several possible sources of induced spillovers from foreign direct...

This paper investigates various aspects of the links between exporting and productivity for a large sample of firms in the United Kingdom. We find evidence to support the proposition that sunk costs are important. Self selection takes place, with larger and more productive firms entering export...

In models of endogenous growth, international trade can impact upon growth by allowing access to the innovative products of other countries. Since developing countries do little if any innovation, it is primarily through trade with developed countries that they profit from higher levels of...