In an interactive model of offshore bidding, two firms located in two different countries bid on a project in a third country under exchange rate uncertainty. Every firm benefits and provides a higher bid when both firms have hedging opportunities. Even if only one bidder has the hedging...

We re-examine the tax-spending nexus using a panel of 50 US state-local government units between 1963 and 1997. We find that, unlike tax revenues, expenditures adjust to revert back to a long-term equilibrium relationship. The evidence on the short-term dynamics is also consistent with the...

The empirical literature has generated mixed correlations between research and development (R&D) undertaken by domestic firms and the inflow of foreign direct investment (FDI) by their multinational rivals. Further, the existing theoretical explanations of such empirical results appear to be...