The importance of trade to an economy needs no emphasis. You sell products or services that you are competitive at and buy those where you are not. Experience of countries such as South Korea and China demonstrate that resources required for development can be garnered through trade; thus,...

Purpose – Foreign firms and domestic multinationals have certain internal advantages which may spillover to domestic firms. However, due to heterogeneity across multinationals, it is not necessary that the effect of the spillovers generated by the foreign firm and that generated by the...

Foreign Direct Investment (FDI) has been an area that has invoked interest both among researchers and policy makers. FDI is one of those areas, which has benefits both for the host country and the home country. Multinational corporations or foreign firms are supposed to have frontier technology,...

Demand for skilled labour from multinational firms is also high which might lead to movement of skilled labour from domestic firms. To prevent such movement domestic firms might feel the pressure to increase their wages. Also, productivity spillovers from foreign firms may increase productivity...