The literature on foreign direct investment (FDI) has recently analyzed the nature of the firm’s entry mode choice in a foreign market, particularly the choice between a joint venture and a wholly owned subsidiary. Most of these companies use Advanced Manufacturing Technologies (AMT) in manufacturing operations conducted in host country. Therefore this paper aims to measure the contribution of ...

We analyze non-cooperative commodity taxation in a two-country trade model characterized by monopolistic competition and international firm and capital mobility. In this setting, taxes in one country affect foreign welfare through the relocation of mobile firms and through changes in the rents accruing to capital owners. With consumption-based taxation, these fiscal externalities exactly offset...

The main objective of this paper is to propose an alternative valuation framework for pricing foreign currency and cross-currency options, which is capable of accommodating existing empirical regularities. The paper generalizes the GARCH option pricing methodology of Duan (1995) to a two-country setting. Specifically, we assume a bivariate nonlinear GARCH system for the exchange rate and the fo...

With technology licensing on quality innovation becoming a general phenomenon in the industry, this study focuses on the impact of quality improvement under different environmental standards. We established a three-country model to analyze the actions taken by the domestic firm located in the home country with high quality technology, the foreign firm located in the foreign country with low qua...

We show that cross-border financial flows arise when countries differ in their abilities to use assets as collateral. Financial integration is a way of sharing scarce collateral. The ability of one country to leverage and tranche assets provides attractive financial contracts to investors in the other country, and general equilibrium effects on prices create opportunities for investors in the f...

Article history: Received 5 December 2011 Received in revised form 31 August 2012 Accepted 4 September 2012 Available online 11 September 2012 We investigate international joint ventures in an integrated market using a two-country model with asymmetric sizes. We show that although the domestic firm in the small country is less efficient, it is possible that the government of the small country i...

FDI enterprises from the same source country agglomerated in a region in China, i.e., a geographical agglomeration, was a main trend in recent years. An oligopoly output competition model was therefore developed between FDI enterprises and host country enterprises, with a conjectural variable introduced to weigh up the cooperation level between relevant enterprises, thus simulating and analyzin...

Abstract We investigate the existence of local (within-country) and global (between-country) knowledge spillovers within a single analytical framework by considering specifically the role of agglomeration economies in fostering interactions between these two types of externalities. Our study is based on a database of Irish manufacturing foreign multinational and domestic plants covering the per...

Whether and what type of the lobbying-induced trade policies can improve the domestic welfare? We show that as compared to the case of no lobbying and the case of domestic lobbying, the domestic-foreign lobbying achieves the lowest tariff and may also realize the highest welfare for the domestic country. Our results suggest that the domestic-foreign lobbying may contribute to a freer trade in t...

We show that cross-border financial flows arise when countries differ in their abilities to use assets as collateral. Financial integration is a way of sharing scarce collateral. The ability of one country to leverage and tranche assets provides attractive financial contracts to investors in the other country, and general equilibrium effects on prices create opportunities for investors in the f...