This paper examines the role of firm heterogeneity in multinationals' choice of FDI type and location. Using Korean firm-level data, we find that more productive firms are more likely than their less efficient counterparts to invest in tough markets and choose horizontal FDI against vertical or...

This paper examines an interplay between tariff policy and parallel-import policy. From a welfare point of view, a host government would prefer allowing parallel imports to prohibiting them. However, if a tariff is not at the government's disposal, there will be no parallel imports in...

Recent theories and empirics suggest that trade openness increases production fragmentation across countries. In this paper, we focus on the relationship between trade openness and firms’ choice of vertical structure. We find supportive, firm-level evidence that upon trade liberalization,...

In educating students national public school systems use different methods of grouping students by ability across schools. We consider four different school systems of student allocation at different stages of schooling and their educational implications. Our two-period model suggests that both...

"Existing studies on the impact of outsourcing on relative wages and the demand for skilled workers mainly focus on aggregate outsourcing, in which imported intermediate inputs are used as a proxy. We depart from the existing studies by focusing on various types of outsourcing based on the...

The proliferation of overlapping free trade agreements (FTA) in recent years has led to pair-wise hub-and-spokes (HAS) throughout the world. Being avid subscribers to FTAs, many countries in the Asia-Pacific region, including the United States, Japan, Singapore, South Korea, Thailand and...

We analyze local content requirement (LCR) and tariff in a two-country model of vertical market-structure with endogenous foreign direct investment (FDI). The foreign firm chooses whether to export or to undertake FDI. The host country anticipates the potential for FDI and selects tariff with or...

We investigate the linkages among outsourcing activities, labour productivity and wage inequality for skilled and unskilled labour by employing a primal approach that involves estimating a nested constant elasticity of substitution production function, using six-digit North American Industry...