This paper studies policy competition for a foreign-owned multiproduct monopolist firm producing two products that are horizontally differentiated between two countries of different size. We show that the equilibrium outcome of FDI competition is determined by the interaction between the market...

This study decomposes the bilateral trade flows using a three-dimensional panel data model. Under the scenario that all three dimensions diverge to infinity, we pro- pose an estimation approach to identify the number of global shocks and country- specific shocks sequentially, and establish the...