We develop a mixed oligopoly model with one public firm and two private firms to explore the licensing strategy considered by the innovated private firm. The major findings of our paper are that: firstly, if the patentee licenses the public firm under some plausible parametric range, the public...

Stephen Hymer (1960, 1976) argues that a desire to increase market power is a strong motive for foreign takeovers. Yet the market-power motive for FDI flows has been largely unexplored in the modern theory of heterogeneous firms. This paper shows that foreign direct investment can increase...

In this chapter I explain an innovative modeling approach that incorporates services, foreign direct investment (FDI) and endogenous productivity effects from services. I begin with a small stylized model to help understand the fundamental economics. The model shows that services liberalization...

Why do many of the world's most productive firms prefer global outsourcing to FDI? To address this issue, this paper introduces an intermediate-good producer to Antràs and Helpman's (2004) North–South model, where the Northern firms can employ the producer via an outsourcing contract and have...

Empirical evidence shows that an increase in trade liberalisation causes an increase in foreign direct investments (FDIs). Here we propose an explanation to this apparent puzzle by exploiting the intensity of competition in a Bertrand duopoly with convex costs where the two firms enter in a new...

We analyze policy options during an international health emergency to provide consumers in least developed countries access to patented life-extending pharmaceuticals. Reliance on property rights exhaustion is shown to be insufficiently flexible and costly to implement. By contrast, the optimal...

We show that the static duopoly model in which firms choose between exporting and foreign direct investment is often a prisoners' dilemma game in which a switch from exporting to foreign direct investment reduces profits. By contrast, we show that when the game is repeated there is a range of...

We analyze tax competition between two countries of unequal size trying to attract a foreign-owned monopolist. When regional governments have only a lump-sum profit tax (subsidy) at their disposal, but face exogenous and identical transport costs for imports, then both countries will always...

A deranged publisher decided to produce a volume of some of my papers and asked me to write some comments. Since these amount to a summary of my views about international trade theory over the latest forty years or so, I’m giving the comments a separate alternative existence as a discussion paper.

Empirical evidence shows that an increase in trade liberalisation causes an increase in foreign direct investments (FDIs). Here we propose an explanation to this apparent puzzle by exploiting the intensity of competition in a Bertrand duopoly with convex costs where the two firms enter in a new...