In this paper, we model trade liberalisation as an endogenous process and shed new light on how economic fundamentals like endowments and technology affect potential gains, the welfare effects of liberalisation and its consequences for intra-industry trade. We construct a general equilibrium...

A number of recent developments, including the analysis of firm level adjustment to falling trade costs, have contributed to a revival of interest in intra-industry trade. Most empirical work still relies on the standard Grubel-Lloyd measure. This however refers only to international trade,...

This paper provides an analysis of non-cooperative tariff-setting in the presence on foreign direct investment. We set up a two-country general equilibrium model with co-existence of exporters and horizontal multinational firms. For symmetric countries, analytical results are derived. The...