This paper studies the strategic role of foreign direct investments (FDIs) when specified as a device for a multinational enterprise (MNE) to precommit capacity. This captures the idea of an MNE preempting the host market or, at least, achieving more profitable outcomes by setting the initial...

This paper investigates, via an example, the effects of oligopolistic competition in a two-country two-good "Ricardian" model of international trade. By contrast, with results that apply to the competitive free-trade equilibrium, at the oligopoly equilibrium industries with different...