This paper addresses the role of mobility costs in shaping the effects of trade integration on wage inequality and welfare. We present a three-factor, two-sector model in which the production technology exhibits capital-skill complementarity and the cost of moving across sectors differs between...

The determinants of investment behaviour are essentially preferences, endowments, production possibilities and institutions. While there is a vast literature discussing the effect of different combinations of the latter three dimensions for given preferences, very little research effort has been...