We study the choice of an MNE in deciding whether to establish a branch plant within a region, explicitly taking into account exit, as well as entry, costs. Protecting workers by having stict lay-off rules deters potential investment while subsidies attract it.

We examine the economic justification for providing investment subsidies to foreign-owned multinationals. These provide employment opportunities and generate demand for domestic intermediate inputs, produced by domestic workers with increasing returns to scale. Offering subsidies to...

We develop a simple framework to show the effects of trade cost reduction on unionized wage, employment and domestic welfare when a domestic firm strategically chooses the amount of formal in-house production and subcontracting to the informal sector. We show that a lower trade cost increases...

This paper analyses the effects of the Single European Market and Swedish Investment liberalisation on the structure of Swedish multinationals with their EU affiliates. The empirical results suggest that the determinants associated with horizontal and vertical multinationals have become...

In this paper, we adopt the vertical differentiation duopoly framework to give a full description of firms' relocation decisions, when the removal either of trade barriers or of restrictions on capital outflows/inflows (globalization) allows them to serve the domestic market through foreign...

Post-production services, such as sales, distribution, and maintenance, comprise a crucial element of business activity. A foreign firm faces a higher cost to perform such services than its domestic rival because of the lack of proximity to customers. We explore an international duopoly model in...

In this paper we consider the impact of improved domestic market access for a foreign service provider. We emphasize the interaction between the different modes of market access commitments in services (cross-border and establishment) market structure, and regulation. We work with a model where...

In this paper I study and quantify the long-run effects of openness to trade and multinational production in a model of endogenous innovation with firm heterogeneity. When trade is liberalized, some multinationals find it more profitable to export and forgo the cost of maintaining capacities in...