The substantial within-industry variation in firm productivity typically observed in the data suggests that there is ample scope for productivity catch-up by laggard firms. We analyse the normative effects of such catch-up. In the short run, where firms' process technologies are fixed, catch-up...

Oligopoly is empirically prevalent in the industries where MNEs operate and national governments compete with fiscal inducements for their FDI projects. Despite this, existing formal treatments of fiscal competition generally focus on the polar cases of perfect competition and monopoly. We...

Foreign-owned firms exhibit widely-documented productivity advantages over domestic firms. To interpret this stylized fact, we model the relationships between FDI flows and national productivity distributions across firms in an international oligopoly. Industrial structure is determined...