Romania experienced a large inflow of FDI Foreign Direct Investment after the revolution in 1989. This was exploited in order to study the importance of agglomeration economies for the location of FDI. Using a conditional logit setup, it was found that external economies from industry-specific foreign agglomeration and service agglomeration...
Foreign investors are often skeptical toward the quality of the domestic institutions and the enforceability of the law in developing countries. Bilateral Investment Treaties (BIT's) guarantee certain standards of treatment that can be enforced via binding investor-to-state dispute settlement outside the domestic juridical system. Developing countries accept restrictions on their...
The skeptics of globalization argue that increased trade openness and foreign direct investment induce developing countries to keep labor costs low, for example, by letting children work. This paper argues that there are good theoretical reasons why globalization might actually have the opposite effect. This is tested with various measures...
Shifts in the extent of competition, which affect markup ratios, are possible sources of aggregate business fluctuations. Markups are countercyclical, and booms are times at which the economy operates more efficiently. It begins with a real model in which markup ratios correspond to the prices of differentiated intermediate inputs relative...
