This paper is about the impact on (low-skilled) labour. We build a new economic geography model in which two types of labour (low and high-skilled) are distinguished and in which, due to wage rigidies, unemployment may arise. We also introduce two types of transportation costs (for goods and...

The aim of this paper is to test for the relevance of spatial linkages for Dutch (outbound) FDI. To do so, and based on recent FDI theories, we estimate a spatial lag model to assess the importance of spatial linkages for Dutch FDI to 18 host countries. As a determinant of FDI, space or...

Trade costs are a crucial in new economic geography (NEG) models. The unavailability of actual trade costs data requires the approximation of trade costs. Most NEG studies do not deal with the ramifications of the particular trade costs specification used. This paper shows that the specification...

By combining two large data sets (on international trade flows and on mergers and acquisitions – M&As), we are able to test two implications of Neary's (2003, 2004a) recent theoretical work. Analyzing M&As in a General Oligopolistic Equilibrium (GOLE) model incorporating strategic interaction...

Using a detailed and large data set on cross-border merger and acquisitions we discuss the relationship between theory and observed empirical characteristics: (i) most FDI is in the form of M&As, (ii) firms engaged in M&As seem to be marketseeking', (iii) M&As come in waves (the most recent wave...

Most FDI takes place between the developed countries, which suggests that the market-seeking motive is important for understanding FDI. However, given the stylized fact that trade barriers (e.g. transportation costs and financial barriers) have declined over the past 20 years, models that aim to...

By combining two large data sets (on international trade flows and cross-border mergers and acquisitions – M&As), we test two implications of Neary’s (2003, 2007) general oligopolistic equilibrium (GOLE) model (incorporating strategic interaction between firms in a general equilibrium...