This paper extends the theory of multinational corporations, identifying three distinct influences of internal trade liberalization by a group of countries on the level and pattern of inward foreign direct investment (FDI). First, the tariff jumping motive encourages plant consolidation. Second,...

This paper explores the links between international trade theory and the practice of trade and industrial policy in open economies, with special attention to three areas where theoretical lessons have been misunderstood in policy debates. The author argues that the 'concertina rule' for tariff...

The author argues that increased foreign competition can affect technical choice and skill differentials even when actual imports do not rise significantly. A model is presented of general oligopolistic equilibrium (GOLE) in which a reduction in import barriers (whether technological or...

We examine optimal industrial and trade policies in a series of dynamic oligopoly games in which a home and a foreign firm compete in R&D and output. Alternative assumptions about the timing of moves and the ability of agents to commit intertemporally are considered. We show that the home export...

Quotas are the predominant means of protection in developed countries, with quota rents commonly shared between exporter and importer. This paper derives shadow prices appropriate to evaluating trade reform under these circumstances and provides a number of useful sufficient conditions for...

We show that the effects of tariff changes on welfare and import volume can be fully characterised by their effects on the generalised mean and variance of the tariff distribution. Using these tools, we derive new results for welfare- and market-access-improving tariff changes, which imply two...