When firms locate segments of their production process abroad we are in presence of international fragmentation of production. This paper discusses the issue both theoretically and empirically. We first assess the absence of a well-articulated and verified theoretical framework to explain the...

This paper explores how the political support for Labour Market Regulation (LMR) is affected by economic and political integration in a two country OLG model. We model LMR as wage regulation and analyse three institutional settings: Autarchy, Economic Union and Political Union. In Autarchy...