The German economy is humming. Tax receipts are pouring in, the labour market is booming, and Germany was and has remained solid as a rock during the euro crisis. That is the current situation. But is Germany also prepared for the digital revolution? A core element of Germany industry (the...

This paper provides the first in-depth study of the organization of knowledge in multinational firms. The paper develops a theoretical model that studies how firms optimally split knowledge between their headquarters and their production plants if communication costs impede the access of...