This paper sets up a two country monopolistic competition model with intra-industry trade to study the effects of an exogenous differential in wage and social policies on the location of industry. Two model scenarios are considered. In the traditional one with physical capital, such a differential induces a relocation effect which increases with the level of trade integration. The ‘new economic...

Business representatives and union leaders in highly industrialised countries often accuse the governments of lessdeveloped countries of practising social dumping in the sense of deliberately neglecting work-place safety legislation, codetermination rights and other fringe benefits which define the quality of workplaces. This paper refutes this view by modelling the transition path of a less-de...

Here we perform the same kind of “integration experiments” as in Rivera-Batiz and Romer (1991), this time in the context of a “quality ladder model”, where international trade integration is not enough to prevent redundancy of R&D efforts. Thus a further kind of integration is analysed: “financial market integration”. We adopt as a setup the Simple Schumpeterian Model in Aghion and Howitt (2005...

Trade Policy and Labor Services: Final Status Options for the West Bank and Gaza This paper considers the policy options of the West Bank and Gaza (WBG) with respect to trade and the exports of labor services. It concludes that i) a non-discriminatory trade policy (NDTP) is unambiguously superior to an FTA with Israel; ii) the WBG should pursue a NDTP with all its neighbors, but only under the ...

This article examines the following case. A set of countries produce goods from labor, government input and natural resources. Because the conservation of natural resources in any country yields utility (e.g. through biodiversity) in every country, and because there is no benevolent international government, a resident of the countries is chosen as the regulator to whom conservation policy is d...

Using a panel data set of bilateral export flows from 12 EU countries to 20 OECD trading partners over the period 1992-2003, a panel cointegration approach to estimating the gravity model is adopted to test for the significance of European regional integration. A comparison of the results indicates that a positive and significant coefficient estimate of the EU dummy variable is found for both t...

This paper studies the e¤ects of international openness and contracting institutions on vertical integration. It …rst derives a number of predictions regarding the interactions between trade barriers, contracting costs, technology intensity, and the extent of vertical integration from a simple model with incomplete contracts. Then it investigates these predictions using a new dataset of over 14...

This paper investigates why multinational ownership is found to increase the probability that a plant will exit. It does so by using Japanese plant data linked to firm data. Plants belonging to a multinational are 9 percentage points more likely to exit when plant, firm and industry characteristics are conditioned on. We find that the “footloose” effect is attributable to multinationals closing...

This paper explores the determinants of intelligence by focusing on the role played by barriers to the diffusion of competence and human capital. The results based on crosssectional data from 167 countries consisting of 1996-2009 averages suggest that, genetic distance to global frontiers has a negative relationship with human capital. Countries that are genetically far from leading nations ten...

This paper o"ers an explanation for the coexistence of convergence across countries and the lack thereof at the regional level in the European Union. The model shows that, even if it accelerates growth and brings convergence across countries, the intensi5cation of international knowledge spillovers due to more cross-country interaction may exacerbate within-country regional disparities, if regi...