The existence of multinational corporations is not self-evident. These corporations have costs linked with business in foreign countries compared to their domestic competitors. Therefore, in the long term, they must have particular advantages over domestic firms. These advantages are external to...

Se explora teóricamente la organización industrial en un país recipiente de inversión extranjera y los nexos estratégicos entre operaciones subsidiarias de corporaciones multinacionales y la industria local

During the past decade all industrial countries attracted sizeable inflows of foreign direct investment (FDI), excluding Italy and Japan: this fact has been interpreted as evidencing a deterioration in Italy�s structural competitiveness. This paper presents the results of a survey conducted...

Using several data sources, we assess the impact of Italy's outward foreign direct investment (FDI) on local employment growth between 1996 and 2001 for 12 manufacturing industries and 103 administrative provinces. Our main result is that, controlling for the local industrial structure and area...

The understanding of foreign investment flows is important for emerging market policy makers, since such flows make up a considerable part of the balance of payments, and since such flows tend to be very volatile. Sudden stops or reversals of investment flows have, indeed, played an important...

In the modern economy, cities are assumed to be in fierce competition over attracting foreign investments in leading sectors of the world economy. Despite the rich theoretical discourse on these 'wars', it remains unclear which territories are competing with each other over which types of...

We first demonstrate that, within a fully integrated economy (FIE) in which there is free mobility of goods and factors, each FIE member's share of total FIE output will equal its shares of the total FIE stock of each productive factor. This equal-share property implies that, if economic...

This paper analytically derives the conditions under which the slope of the tax reaction function is negative in a classical tax competition model. If countries maximize welfare, we show that a negative slope (reflecting strategic substitutability) occurs under relatively mild conditions....

We empirically examine the heterogeneity in the effects of multiple dimensions of distance on trade across detailed product groups. Using finite mixture modeling on bilateral trade data at the 3-digit SITC level, we endogenously group product categories into an, a priori unknown, number of...

We decompose capital flows--both debt and equity--into public and private components and study their relationship with productivity growth. This exercise reveals that international capital flows are mainly shaped by government decisions and sovereign to sovereign transactions. Specifically, we...