We develop a new framework for the analysis of the impact of trade liberalization on the wage structure. Our model focuses on the decision of workers to accumulate firm-specific skills, by "on-the-job" training, knowing that this means their future wages will have to be negotiated, and that the...

This paper explores the effect of a potential joint-venture breakup on the level of technology transfer in a set-up with exploration-exploitation trade-offs in the presence of time compression costs. We consider a joint-venture relationship between a technologically advanced multinational firm...

The paper introduces the concept of a firm's normal employment level as a weighted average of past employment levels and it analyzes the impact of an incentive scheme in which a firm receives a reward (or pays a penalty) when it deviates above (below) its normal employment level. The result is...

This paper contributes to the green paradox literature by using a resource extraction framework with heterogeneous energy sources. A key feature of the model is a capacity constrained green backstop resource, which implies the simultaneous use of the expensive backstop resource and the cheaper...

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two...

We consider the evolution of preferences when trade occurs between two countries. We show that if one country is much larger than the other, its preferences can eventually take over the preferences of the second country. This result may provide an explanation of why small countries sometimes...

We study the role of tax share and transparency of governance on growth and stagnation. A local government maximizes its private benefits using two activities. The first one consists of providing local public goods that help local firms to increase profits, thus enlarging tax revenue. The second...