The virtual economy argument for Russia suggests that barter allows the parties to pretend that the manufacturing sector is producing value added by enabling this sector to sell its output at a higher price than its market value. We confront this prediction with the actual pricing behaviour of...

This Policy Briefing examines how Europe’s corporations are changing the way they do business since the 2004 EU Enlargement. Dalia Marin argues that firms are adapting to heightening global competition by shifting decision-making processes. The author gives policy recommendations in the areas...

Countertrade consists of bilateral agreements (usually) between Western industrial enterprises and government agencies or state-owned enterprises in developing countries (LDCs) and centrally planned economies (CPEs), whereby sales of goods by the western exporter are linked contractually to the...

Starting with the international debt crisis in the 1980s, international barter increased substantially. More recently, barter has emerged in Russia and South East Asia. This paper examines how barter can help highly indebted countries to finance imports if they cannot use standard credit...

This paper provides an empirical analysis of countertrade based on 230 transactions whose details were collected from trading houses and firms involved in countertrade. Section 2 describes the data base and states the stylised facts of countertrade that need to be explained. Section 3 gives a...

What insights can be gained from bringing the theory of the firm to the global economy? I discuss several new features of the world economy that can be explained by incorporating the theory of the firm into the theory of international trade. Among the new features I discuss are the move to...

The compensation of executive board members in Germany has become a highly controversial topic since Vodafone's hostile takeover of Mannesmann in 2000 and it is again in the spotlight since the outbreak of the financial crisis of 2009. Based on unique panel data evidence of the 500 largest firms...

We incorporate trade in tasks à la Grossman and Rossi-Hansberg (2008) into a small open economy version of the theory of firm organization of Marin and Verdier (2012) to examine how offshoring affects the way firms organize. We show that the offshoring of production tasks leads firms to...

We incorporate trade in tasks à la Grossman and Rossi-Hansberg (2008) into a small open economy version of the theory of firm organization of Marin and Verdier (2012) to examine how offshoring affects the way firms organize. We show that the offshoring of production tasks leads firms to...

Recent literature on international trade has established that the most productive firms become multinationals. But our data reveal a startling variation in productivity levels of foreign affiliates across the countries in Eastern Europe of the same European multinational parent firms suggesting...