Constructing a two-good (competitive and imperfectly-competitive goods), two-primary factor (capital and labor) and two-country model of international trade where the imperfectly-competitive sector is subject to increasing returns to scale, we establish an oligopolistic version of the...

Is there evidence from China's pre-WTO accession period that newly imposed U.S. or EU import restrictions deflect Chinese exports to third markets? We examine this question by drawing on a newly constructed data set of U.S. and EU product-level import restrictions on Chinese trade imposed...

The simple gravity equation explains a great deal about the data on bilateral trade flows and is consistent with several theoretical models of trade. We argue that alternative theories nevertheless predict subtle differences in key parameter values, depending on whether goods are homogeneous or...

In this paper the structure of intra-firm trade within the context of transfer price manipulation by a multinational firm is endogenized. "High" and "low" values of host-country tax rates give rise to intra-firm trade in final goods and intermediate inputs, and "intermediate" values of the tax...

This paper uses a heterogeneousfirms model to examine the procompetitive channel through which FDI affects national welfare. The model shows that the country from which FDI originates experiences a welfare gain following liberalization. However, a counterintuitive finding is that the welfare of...

We develop a matching model of foreign direct investment to study how multinational firms choose between greenfield investment, acquisitions and joint ownership. Firms must invest in a continuum of tasks to bring a product to market. Each firm possesses a core competency in the task space, but...

A large fraction of affiliates owned by multinational manufacturing companies operate in the wholesale and retail sectors. This paper proposes a model of trade, horizontal FDI, and export-supporting FDI (ESFDI). ESFDI reduces distribution costs abroad, while production remains at home. ESFDI...

This paper explores the effects of transport costs, tariffs, and foreign wage rates on the domestic economy in the presence of reverse imports, with special emphasis on inter-firm cost asymmetry in an international oligopoly model. To serve the domestic market, a foreign firm produces in the...

Foreign producer services can provide substantial benefits for domestic firms. We build on earlier monopolistic-competition models of intermediate producer services in this paper. Results show that: (1) while foreign services are partial-equilibrium substitutes for domestic skilled labour, they...

We analyse the tax/subsidy competition between two potential host governments to attract the plants of firms in a duopolistic industry. While competition between identical countries for a monopolist's investment is known to result in subsidy inflation, two firms can be taxed in equilibrium with...