Trade theory consists of a portfolio of models. What elements might be useful in modeling the offshoring of white-collar services, or do these issues call for an entirely fresh approach? I try to...
including ©notice, is given to the source. Export-Platform Foreign Direct Investment (2003)
Karolina Ekholm, Rikard Forslid, James R. Markusen, Karolina Ekholm, Rikard Forslid, James R. Markusen, ...
Export-platform foreign direct investment in which the affiliate’s output is (largely) sold in third markets rather than in the parent or host markets has received empirical attention recently, but...
Multinational Firms and the Theory of International Trade (2002)
Multinational Firms and the Theory of International Trade James R. Markusen Despite the great importance of multinational firms in international economics, theoretical and empirical research on these...
Markusen, James R., Venables, Anthony J.
A number of recent papers reach different conclusions concerning the effects of trade and industrial policy on imperfectly competitive industries; the implications for policy are therefore sensitive...
The Theory of Endowment, Intra-Industry and Multinational Trade
Markusen, James R., Venables, Anthony J.
We consider a trade model combining a 2x2x2 Heckscher-Ohlin structure, monopolistic competition, transport costs and multinational corporations. We demonstrate how the mix of national and...
Understanding the Home Market Effect and the Gravity Equation: The Role of Differentiating Goods
Feenstra, Robert, Markusen, James R., Rose, Andrew K
This paper argues that the theoretical foundations for the gravity equation are general, while the empirical performance of the gravity equation is specific to the type of goods examined. Most...
Export-Platform Foreign Direct Investment
Ekholm, Karolina, Forslid, Rikard, Markusen, James R.
Export-platform foreign direct investment in which the affiliate’s output is (largely) sold in third markets rather than in the parent or host markets has received empirical attention recently, but...
Learning on the Quick and Cheap: Gains from Trade Through Imported Expertise
Markusen, James R., Rutherford, Tom
Gains from productivity and knowledge transmission arising from the presence of foreign firms has received a good deal of empirical attention, but micro-foundations for this mechanism are weak. Here...
A Multi-Country Approach to Factor-Proportions Trade and Trade Costs
Markusen, James R., Venables, Anthony J.
Classic trade questions are reconsidered by generalizing a factor-proportions model to multiple countries, multi-stage production, and country-specific trade costs. We derive patterns of production...
Trade theory consists of a portfolio of models. What elements might be useful in modeling the offshoring of white-collar services, or do these issues call for an entirely fresh approach? I try to...
Issue Linking in Trade Negotiations: Ricardo Revisited or No Pain No Gain
Ignatius J. Horstmann, James R. Markusen, Jack Robles
There has been much discussion about what issues should be included in international "trade" negotiations. Different countries, firms, and activist groups have quite different views regarding which...
A Multi-Country Approach to Factor-Proportions Trade and Trade Costs
James R. Markusen, Anthony J. Venables
Classic trade questions are reconsidered by generalizing a factor-proportions model to multiple countries, multi-stage production, and country-specific trade costs. We derive patterns of production...
Anti-Competitive and Rent-Shifting Aspects of Domestic-Content Provisions in Regional Trade Blocks
Florencio Lopez-de-Silane, James R. Markusen, Thomas F. Rutherford
Regional trade agreements must specify domestic-content rules (rules of origin) that define the conditions under which a good qualifies as 'domestic' and so may be freely traded within the block. The...
Discrete Plant-Location Decisions in an Applied General-Equilibrium Model of Trade Liberalization
James R. Markusen, Thomas F. Rutherford
Theoretical and applied work in industrial-organization approaches to international trade typically assume either that there are fixed numbers of firms, or that there is free entry and exit with a...
Teaching Locals New Tricks: Foreign Experts as a Channel of Knowledge Transfers
James R. Markusen, Natalia Trofimenko
Gains from productivity and knowledge transmission arising from the presence of foreign firms have received a good deal of empirical attention, but theoretical micro-foundations for this mechanism...
Trade in Business Services in General Equilibrium
Markusen, James R., Strand, Bridget
Trade in business services has been attracting attention from academic researchers, policy makers, and business journalists. While there are many anecdotes, there has been little in the way of formal...
Teaching locals new tricks: foreign experts as a channel of knowledge transfer
Markusen, James R., Trofimenko, Natalia
Gains from productivity and knowledge transmission arising from the presence of foreign firms have received a good deal of empirical attention, but theoretical micro-foundations for this mechanism...
Trade in Goods and Factors with International Differences in Technology
A general model of trade caused by international differences in production technology is developed using techniques of duality theory. For the caseof product-augmenting differences in technology, it...
Nikolaj Malchow-Møller, James R. Markusen, Bertel Schjerning
Foreign-owned firms are often hypothesized to generate productivity "spillovers" to the host country, but both theoretical micro-foundations and empirical evidence for this are limited. We develop a...
Endogenous Market Structures in International Trade
Ignatius J. Horstmann, James R. Markusen
Almost all of the large literature on international trade with imperfect competition assumes exogenous market structures. The purpose of this paper is to develop a simple model that generates...
First Mover Advantages, Blockaded Entry, And the Economics of Uneven Development
A two-sector, two-period trade model is developed in which one sector has increasing returns based on the creation of specialized intermediate inputs. One of the two (otherwise identical) countries...
Florencio Lopez-de-Silane, James R. Markusen, Thomas F. Rutherford
Conventional analysis in the trade-industrial-organization literature suggests that, when a country has some market power over an imported good, some small level of protection must be welfare...
Noncooperative Equilibria in Regional Environmental Policies When Plant Locations are Endogenous
James R. Markusen, Edward R. Morey, Nancy Olewiler
A two-region model is presented in which an imperfectly competitive firm produces a good with increasing returns at the plant level, and in which shipping costs exist between the two markets....
Malchow-Møller, Nikolaj, Markusen, James R., Schjerning, Bertel
Foreign-owned firms are often hypothesized to generate productivity “spillovers” to the host country, but both theoretical micro-foundations and empirical evidence for this are limited. We...
Export-Platform Foreign Direct Investment
Karolina Ekholm, Rikard Forslid, James R. Markusen
A poorly understood empirical phenomenon is export-platform affiliate production (EP), particularly for sale in third countries rather than in the parent or host countries. We develop a three-region...
The Role of Multinational Firms in the Wage-Gap Debate.
Markusen, James R, Venables, Anthony J
The observation of an increase in the ratio of skilled to unskilled wages in the high-income countries and in some cases in low/middle-income countries has led to considerable discussion and...
The Boundaries of Multinational Enterprises and the Theory of International Trade.
This paper begins with a review of empirical evidence on multinational firms. Conceptual underpinnings of a theory are developed, relying in particular on the notion of knowledge capital as a mobile,...
Linda Hunter, James R. Markusen, Thomas F. Rutherford
Free trade ; North American Free Trade Agreement ; Automobile industry and trade
Exploring New Markets: Direct Investment, Contractual Relations and the Multinational Enterprise.
Horstmann, Ignatius J, Markusen, James R
The authors consider the multinational firm's decision on whether to enter a new market immediately via direct investment or to contract initially with a local agent and (possibly) invest later. Use...
Accounting for Growth with New Inputs.
Feenstra, Robert C, Markusen, James R
This paper examines the aggregate production function in an economy characterized by the creation of new, intermediate inputs. The authors show how growth can be decomposed into changes in higher...
Explaining the Volume of North-South Trade.
Markusen, James R, Wigle, Randall M
Much of the recent literature on scale economies has been motivated by the large volume of trade among the industrialized countries relative to "North-South" trade. This paper presents theoretical...
Firm-Specific Assets and the Gains from Direct Foreign Investment.
Horstmann, Ignatius J, Markusen, James R
It is widely held that multinational enterprises arise as a consequence of the existence of knowledge-based, firm-specific assets such as superior technology or management know-how. These assets are...
Using the gravity equation to differentiate among alternative theories of trade
Robert C. Feenstra, James R. Markusen, Andrew K. Rose
The simple gravity equation explains a great deal about the data on bilateral trade flows and is consistent with several theoretical models of trade. We argue that alternative theories nevertheless...
Learning on the Quick and Cheap: Gains from Trade through Imported Expertise
James R. Markusen, Thomas F. Rutherford
Gains from productivity and knowledge transmission arising from the presence of foreign firms has received a good deal of empirical attention, but micro-foundations for this mechanism are weak . Here...
Licensing versus Direct Investment: A Model of Internalization by the Multinational Enterprise.
Ignatius Horstmann, James R. Markusen
A firm must decide whether to serve a foreign market by exporting, building a foreign branch plant , or licensing the production to an existing foreign producer. The ex istence of reputations implies...
Production, Trade, and Migration with Differentiated, Skilled Workers.
A model is developed in which the output of one traded sector (e.g., high tech) is produced using consultan ts who supply differentiated skilled services. An external economy is shown to exist, which...
Micro-foundations of External Economies.
The first purpose of this paper is to specify certain microeconomic determinants of "external" economies and then analyze the consequences of these economies for production and welfare in a simple...
Discriminating among Alternative Theories of the Multinational Enterprise.
Markusen, James R, Maskus, Keith E
Recent theoretical developments have incorporated endogenous multinational firms into the general-equilibrium model of trade. One simple taxonomy separates the theory into "vertical" models, in which...
Commitment to Rules on Investment: The Developing Countries' Stake.
This study examines foreign direct investment into developing countries, and the stake those countries have in liberalizing or restricting these long-term investments. Of particular interest is the...
Explaining the Volume of Trade: An Eclectic Approach.
Divide the world into a capital-abundant North and a labor-abundant South. Subdivide the North into two identical regions, East and West.Modern trade theory predicts intraindustry trade in...
National Product Functions in Comparative Steady-State Analysis.
Manning, Richard, Markusen, James R
The structural properties of steady state are well understood for multisector models, but the comparative dynamics of long-run growth are much less developed. By exploiting duality theory, this paper...
Strategic Investments and the Development of Multinationals.
Horstmann, Ignatius J, Markusen, James R
A model of multinational behavior is presented in which either the existence or absence of multinationals can be a Nash equilibrium outcome. The key determinant is the relationship between plant...
National Standards and International Trade
Ganslandt, Mattias, Markusen, James R.
Standards and technical regulations which govern the admissibility of imported goods into an economy raise costs of exporters entering new markets, and may have a particularly high impact on firms...
FACTOR ENDOWMENTS AND TRADE WITH INCREASING RETURNS: GENERALIZATIONS AND EXTENTIONS
Existing trade models using scale economies of the external or average-cost-pricing type tend to be restrictive in terms of dimensionality, functional forms, etc. Robustness of the results is...
Learning on the quick and cheap : gains from trade through imported expertise
Markusen, James R., Rutherford, Thomas F.
Gains from productivity and knowledge transmission arising from the presence of foreign firms has received a good deal of empirical attention, but micro-foundations for this mechanism are weak . Here...
Multinational Firms and the Theory of International Trade
Despite the great importance of multinational firms in international economics, theoretical and empirical research on these firms has generally been conducted separately from that on international...
Environmental Policy When Market Structure and Plant Locations are Endo-genous
James R. Markusen, Edward R. Morey, Nancy Olewiler
A two-region, two-firm model is developed in which firms choose the number and the regional locations of their plants. Both firms pollute and, in this context, market structure is endogenous to...
Linda Hunter, James R. Markusen, Thomas F. Rutherford
A theoretical model is developed and applied to the North American auto industry, motivated by the possibility of US-Mexico free trade. Special features of the model include (1) significant scale...
Multinational Firms, Technology Diffusion and Trade
Wilfred J. Ethier, James R. Markusen
Empirical evidence indicates a close association between multinational firms and knowledge capital, a public good within the firm. We model a firm which wishes to exploit its knowledge capital...
Accounting for Growth With New Inputs
Robert C. Feenstra, James R. Markusen
In this paper we examine how to account for growth when new inputs are being created. In particular, we obtain a decomposition of growth into that due to a higher quantity of existing inputs, and...
Exploring New Markets: Direct Investment, Contractual Relations and the Multinational Enterprise
Ignatius J. Horstmann, James R. Markusen
We consider the multinational firm's decision on whether to enter a new market immediately via direct investment or to contract initially with a local agent and (possibly) invest later. Use of a...
Multinational Firms and The New Trade Theory
James R. Markusen, Anthony J. Venables
A model is constructed in which multinational firms may arise endogenously. Multinationals exist in equilibrium when transport and tariff costs are high, incomes are high, and firm-level scale...
Multinational Production, Skilled Labor and Real Wages
James R. Markusen, Anthony J. Venables
Adapting our earlier model of multinationals, we address policy issues involving wages and labor skills. Multinational firms may arise endogenously, exporting their firm-specific knowledge capital to...
Costly Pollution Abatement, Competitiveness, and Plant Location Decisions
The US-Mexico free-trade debate included some theoretical assertions that were then used as arguments against trade and investment liberalization. (1) Trade liberalization increases the degree to...
The Theory of Endowment, Intra-Industry, and Multinational Trade
James R. Markusen, Anthony J. Venables
We consider a trade model combining a 2x2x2 Heckscher-Ohlin structure, monopolistic competition, transport costs, and multinational corporations. We demonstrate how the mix of national and...
James R. Markusen, Anthony J. Venables, Denise Eby Konan, Kevin H. Zhang
This paper contributes to research endogenizing multinational firms in general-equilibrium trade models. We attempt to integrate separate contributions on horizontal multinationals which produce the...
Vertical Multinationals and Host-Country Characteristics
Kevin H. Zhang, James R. Markusen
The literature on multinationals and developing countries has examined the causality" running from direct investment to changes in country characteristics (wages skills, etc.) and also the opposite...
Trade versus Investment Liberalization
Despite several theoretical contributions and considerable informal empirical evidence" to the contrary, a notion that trade and investment are substitutes persists in trade policy" analysis. This...
Liberalization and Incentives for Labor Migration: Theory with Applications to NAFTA
James R. Markusen, Stephen Zahniser
One of the motivations for NAFTA from the US point of view was to reduce the" incentives for Mexican migration into the US. Unskilled rural males are a primary source of" illegal immigration and also...
Foreign Direct Investment as a Catalyst for Industrial Development
James R. Markusen, Anthony J. Venables
How does an FDI project affect local firms in the same industry? Competition in the" product and factor markets tends to reduce profits of local firms, but linkage effects to supplier" industries may...
Contracts, Intellectual Property Rights, and Multinational Investment in Developing Countries
The institution and enforcement of property rights and contracts have been an important policy issue for the developing countries, the transition economies, and the developed countries in the 1990s....
Estimating the Knowledge-Capital Model of the Multinational Enterprise
David L. Carr, James R. Markusen, Keith E. Maskus
What we term the firm includes three principal assumptions. First, services of knowledge-based and knowledge-generating activities, such as R&D, can be geographically separated from production and...
Multinational Firms: Reconciling Theory and Evidence
James R. Markusen, Keith E. Maskus
An important component of Robert Lipsey's work has been his research on multinational firms, and his careful documentation of their behavior in terms of production and intra-firm trade. In this...
Discriminating Among Alternative Theories of the Multinational Enterprise
James R. Markusen, Keith E. Maskus
Recent theoretical developments have incorporated endogenous multinational firms into the general-equilibrium model of trade. One simple taxonomy separates the theory into vertical' models in which...
Foreign Direct Investments in Services and the Domestic Market for Expertise
James R. Markusen, Thomas F. Rutherford, David Tarr
Producer services such as managerial and engineering consulting can provide domestic firms with the substantial benefits of specialized knowledge that would be costly in terms of both time and money...
General-Equilibrium Approaches to the Multinational Firm: A Review of Theory and Evidence
James R. Markusen, Keith E. Maskus
Beginning in the early 1980s, theoretical analyses have incorporated the multinational firm into the microeconomic, general-equilibrium theory of international trade. Recent advances indicate how...
A Unified Approach to Intra-Industry Trade and Direct Foreign Investment
James R. Markusen, Keith E. Maskus
Economic interactions among the high-income developed countries are characterized by high degrees of both intra-industry trade and intra-industry affiliate production and sales. Similar high-income...
Standards and Related Regulations in International Trade: A Modeling Approach
Mattias Ganslandt, James R. Markusen
Standards and technical regulations which govern the admissibility of imported goods into an economy raise costs of exporters entering new markets, and may have a particularly high impact on firms...
Multi-Issue Bargaining and Linked Agendas: Ricardo Revisited or No Pain No Gain
Ignatius J. Horstmann, James R. Markusen, Jack Robles
There has been much discussion about what issues should be included in international 'trade' negotiations. Different countries, firms and activists groups have quite different views regarding which...
Learning on the Quick and Cheap: Gains from Trade Through Imported Expertise
James R. Markusen, Thomas F. Rutherford
Gains from productivity and knowledge transmission arising from the presence of foreign firms has received a good deal of empirical attention, but micro-foundations for this mechanism are weak . Here...
Trade in Business Services in General Equilibrium
James R. Markusen, Bridget Strand
Trade in business services has been attracting attention from academic researchers, policy makers, and business journalists. While there are many anecdotes, there has been little in the way of formal...
Sub-national Differentiation and the Role of the Firm in Optimal International Pricing
Edward J. Balistreri, James R. Markusen
We illuminate the relationship between optimal firm pricing and optimal trade policy by exploring a generalized model that accommodates product differentiation at both the national and sub-national...
Markusen, James R, Wigle, Randall M
A theoretical analysis of "optimal" (Nash equilibrium) tariff rates is presented. A numerical general equilibrium model is then used to find Nash equilibrium tariff rates for the United States and...
Multinational Firms and the Theory of International Trade
Multinational Firms and the Theory of International Trade James R. Markusen Despite the great importance of multinational firms in international economics, theoretical and empirical research on these...
Physical Capital, Knowledge Capital and the Choice Between FDI and Outsourcing
Yongmin Chen, Ignatius J. Horstmann, James R. Markusen
There exist two approaches in the literature concerning the multinational firm's mode choice for foreign production between an owned subsidiary and a licensing contract. One approach considers...
Sub-national differentiation and the role of the firm in optimal international pricing
Balistreri, Edward J., Markusen, James R.
Armington assumption Monopolistic competition Terms-of-trade effects Trade
Teaching locals new tricks: Foreign experts as a channel of knowledge transfers
Markusen, James R., Trofimenko, Natalia
Gains from productivity and knowledge transmission arising from the presence of foreign firms have received a good deal of empirical attention, but theoretical micro-foundations for this mechanism...
Nikolaj Malchow-Møller, James R. Markusen, Bertel Schjerning
Many papers have documented a wage premium in foreign-owned and large firms. However, there is very little formal theory in the literature and empirical analyses are typically not based on hypotheses...
James R. Markusen, Bridget Strand
At some conceptual level, trade in goods and services are not that much different. However, the speed at which trade and foreign investment in services is growing, along with the fact that the...
Physical Capital, Knowledge Capital and the Choice Between FDI and Outsourcing
Chen, Yongmin, Horstmann, Ignatius J, Markusen, James R.
There exist two approaches in the literature concerning the multinational firm's mode choice for foreign production between an owned subsidiary and a licensing contract. One approach considers...
International Welfare and Employment Linkages Arising from Minimum Wages
Hartmut Egger, Peter Egger, James R. Markusen
We formulate a two-country model with monopolistic competition and heterogeneous firms to reconsider labor market linkages in open economies. Labor-market imperfections arise by virtue of...
International Welfare and Employment Linkages Arising from Minimum Wages
Egger, Hartmut, Egger, Peter, Markusen, James R.
We formulate a two-country model with monopolistic competition and heterogeneous firms to reconsider labor market linkages in open economies. Labor-market imperfections arise by virtue of...