Information asymmetry creates value and incentives for firms from different countries to merge. To demonstrate this point, we develop a model of international trade under oligopolistic competition and asymmetric information, in which domestic firms are informed of the local market demands, but foreign firms are not. By emphasizing two features of a merger between a domestic firm and a foreign f...

This article analyzes an asymmetric rent-seeking contest with free riding where valuation on the prize (rent) and effectiveness of rent-seeking effort may differ among agents and the victory of an agent may not exclude some agents other than the winner of the contest to consume the prize of the contest. After proving the unique existence of pure-strategy Nash equilibrium, this article examines ...

This paper provides a unified framework for quantifying the cross-country and cross-sector interactions among trade, innovation, knowledge diffusion. is used to study effect of trade liberalization in an endogenous growth model which comparative advantage stock are determined by innovation The calibrated match observed heterogeneity production, efficiency, spillovers. counterfactual analysis sh...

This paper analyzes the behavior of monopoly firm serving its products to two countries. The main focus of this paper is on how the product-quality choice in different markets are related with the cost structure of the firm. First, This paper examines the effects of production and R&D costs on the product quality separately, and then discusses the general case where the both costs exists. This ...

There are two independent strands of literature on the geographic distribution of economic activities. One is the new economic geography that emphasizes product diversity, and the other is probabilistic migration that stresses taste heterogeneity in residential location. This article incorporates these two characteristics into a single framework, and analyzes how they affect the number and stab...

The Tiebout hypothesis (residential choice depends solely on local public goods) is extensively applied to explain geographic segregation, and the related literature finds that residents are segregated according to their heterogeneous preferences for public goods. This paper further examines the heterogeneous preferences for private goods in a spatial economy without public goods. Specifically,...

We investigate how the division of aggregate income into per capita income and population affects the margins of imports. In the first part, we use data on imports of 123 countries to document a positive relationship between per capita income and both the extensive and quality margin of imports, for a given level of aggregate GDP. These relations hold at various levels of disaggregation. While ...

Globalization and Labor Market Outcomes: Wage Bargaining, Search Frictions, and Firm Heterogeneity We introduce search unemployment à la Pissarides into Melitz’ (2003) model of trade with heterogeneous firms. We allow wages to be individually or collectively bargained and analytically solve for the equilibrium. We find that the selection effect of trade influences labor market outcomes. Trade l...

We develop a new methodology for measuring management practices in hospitals, and use this in 182 interviews of physicians and managers in public and private hospitals (covering 61% of English acute trusts). We find our management measure is strongly correlated with hospital performance, both clinical outcomes like survival rates from heart attacks, and general operational and financial outcome...

In this paper, we aim at investigating from a game theory perspective whether trade liberalization can promote a collusive intra-industry trade and whether such a collusive trade is always socially desirable compared to the autarchy solution. We show that, under Cournot competition, economic integration is anti-competitive if collusive trade is a possible outcome of the repeated game; under pri...