Global economic development in the past decades has been characterized by a rapidly progressing intensification in world trade and international division of labor. In recent decades, as a result of the expansive development of international merchandise trade, cargo shipping has been one of the...

We study the effects of FDI and increasing multinational activity utilizing a macroeconomic two-sector model of the small open economy with flexible exchange rates and perfect capital mobility. The focus is on horizontal greenfield investment and its impact on production, exchange rates, trade,...