This paper develops a theory of strategic vertical DFI (direct foreign investment) to suggest an explanation for the empirical puzzle of the missing "pollution-haven" effect. It focuses on a firm's strategic incentive to create multi-market interdependence (in addition to other conventional...

This paper develops a theory of strategic vertical DFI (direct foreign investment) to suggest an explanation for the empirical puzzle of the missing "pollution-haven" effect. It focuses on a firm's strategic incentive to create multi-market interdependence (in addition to other conventional...

This paper presents a model in which economies of scope in production play a key role in a vertically-linked production structure. It identifies the divergence in the degrees of economies of scope and the attribute spaces of the products in different stages of production as a fundamental...