This paper examines the implications of various contracting alternatives between exporting and importing firms on the volume of international transactions. The contracts that we study are determined in a bargaining situation under exchange-rate uncertainty. First we look at contracts which...

This paper examines host country government (HCG) commercial policy towards imports resulting from intrafirm trade conducted by a multinational corporation (MNC). The effectiveness of the HCG's commercial policy is impaired by its limited information about the MNC's cost of production. The...

The paper examines the impact of the emergence of regional blocs on the patterns of interbloc and intrabloc trade when firms have the option to engage in foreign direct investment (FDI). For exogenously given external tariffs, when firms have the option to engage in FDI, all interbloc trade may...

In this paper we investigate how strategic aspects influence the choice between exporting and servicing foreign markets by setting up a plant in the foreign country. We show that tariffs on imports in conjunction with the size of the set up costs incurred while setting up plants and the size of...