This paper studies the entry decision of a multinational enterprise into a foreign market. Two alternative entry modes for a foreign direct investment are considered: Greenfield investment versus acquisition. In contrast to existing approaches, the acquisition price and the profits under both entry modes are endogenously determined. Interestingly, we find that the optimal entry mode decision is...

When multinational firms expand their operations in tax havens, do they divert activity from non-havens? Much of the debate on tax competition presumes that the answer to this question is yes. This paper offers a model for examining the relationship between activity in havens and non-havens, and discusses the implications of recent evidence in light of that model. Properly interpreted, the evid...

This paper analyzes the effects of a potential spillover on technology transfer of a multinational enterprise and on the host country policy. In particular, we examine how both parties’ incentives can be controlled through the ownership structure in an international joint venture. In contrast to existing arguments we show that spillovers must not always have negative effects on technology trans...

I analyze the welfare implications of protecting intellectual property rights (IPRs) in developing countries through its impact on innovation, market structure, and technology transfer. FDI, tariffs, and cooperation are introduced to the strategic IPR literature. In a North-South framework, the Southern government sets the IPR policy strategically by anticipating the Northern firm’s decision on...

Many developing countries are liberalizing their economies to allow higher equity participation by the foreign firms. We argue that the possibility of joint venture can reduce the number of technology transfers. Hence, joint venture can reduce the welfare of a host-country by creating higher market-concentration. However, higher profit generation under joint venture encourages the foreign firm ...

Despite plausible theoretical grounds for presuming a positive relationship between foreign direct investment inflows (FDI) and economic growth, existing empirical evidence on this nexus is inconclusive. In an effort to add to the empirical literature, this paper estimates the relationship between FDI and the rate of growth of GDP using a stochastic frontier model and employing panel data cover...

This paper extends the literature on productivity spillovers from inward FDI. We use comparable industry level data for 17 OECD countries and investigate the importance of horizontal and vertical spillovers, and differences between CEEC and other OECD countries. Results show that there is evidence for spillovers through vertical backward linkages between multinationals and domestic firms for al...

A hypergraph is 2-intersecting if any two edges intersect in at least two vertices. Blais, Weinstein and Yoshida asked (as a first step to a more general problem) whether every 2-intersecting hypergraph has a vertex coloring with a constant number of colors so that each hyperedge has at least min{|e|, 3} colors. We show that there is such a coloring with at most 5 colors (which is best possible...

Iran-China relations are deeply rooted in history and have been enhanced recently with bilateral cooperation in the areas of energy, arms sales, trade, political cooperation and cultural ties. The objective of this paper is to analyze the role of international outsourcing in form of trading intermediate products on bilateral trade relations between Iran and China. As an empirical work, we h...