We study the implication of credit constraints for the sustainability of product market collusion in a bank financed Cournot duopoly when firms face an imperfect credit market. We consider two situations without or with credit rationing. When there is no credit rationing moderately higher cost...

It is usually believed that higher competition, implying more active firms, benefits consumers. We show that this may not be the case in an industry with asymmetric cost firms. A rise in the number of more cost inefficient firms makes the consumers worse-off in the presence of a welfare...

Given a commercial banking firm facing credit risk we develop a dynamic hedging model where the bank management can use credit derivatives. In a continuous-time framework optimal hedging strategies, deposit and loan decisions and consumption are studied. It is shown that the optimal hedge ratio...

The study suggests : an increase in the international division of labour according to the intra-trade scenario does not imply that nations have to negatively compete for high export quotas, rather their international interdependenee is highly beneficial for both world and domestic economic...

This paper examines one possible explanation for intra-trade flows derived in light of an international environment characterized by product differentiation, economies of scale, and monopolistic competition. The analysis may be structured within a more general formulated Heckscher-Ohlin...

Intra-foreign direct investment flows indicate an intensive specialization effect within the various domestic branches of the international economy combined with an increasing expansion of the differentiated product sortiments of the world's multinational firms. Rationalisation of operations on...

In the pure theory of international trade the foundation of commodity exchange is based upon differences in autarky relative prices. The theory of comparative advantage attempts to precisely define this foundation by formulating a systematic relationship between the pattern of comparative...

The rapid expansion of West German exports in the 1970s has now been overtaken by the more rapid growth of West German FDI. The experience of West German multinationals reftects this trend; companies which invest abroad are largely concerned either with expanding into new export markets or with...

The importance of informational aspects of market processes has received considerable attention. This paper considers the problem of adverse selection and the possible outcomes under different risk behaviour assumptions.The paper is structured as follows : section II presents briefly some...

The paper examines theoretically the empirical observation or increasing levels of intra-industrial trade flows. The relationship between intra-industrial trade and consumer preferences in addition to product differentiation advanced by internationally active firms are discussed within the...