Publications

A model is considered in which optimal search intensity is a result of a trade-off between shortrun losses due to higher search costs (more interviews, commuting, etc.) and long-run gains due to a hig…

The National Treatment (NT) clause is the first-line defense in the GATT (and in most other trade agreements) against opportunistic exploitation of the inevitable incompleteness of the agreement. This…

Agell et al. (2005) criticise our earlier findings (Fölster and Henrekson 2001) of a robust negative relationship between government size and economic growth for an extended sample of rich countries. I…

We develop an urban model in which all jobs are located in the Central Business District (CBD) and workers, who have high relocation costs, optimally choose their residence between the CBD and the cit…

Why do mergers occur in waves? Why do so many mergers occur despite substantial empirical evidence that they often fail and lead to lower profits? Why do share prices rise at the same time as profits…

Empirically, disincentive effects on work of generous welfare state arrangements tend to appear with a substantial time lag. One explanation is that norms concerning work and benefit dependency delay…

We first develop a theoretical model in which individuals are embedded within a network of social relationships. We show that, conditional on being employed, the probability to find a job through soci…

We construct a model of endogenous mergers and study some issues of whether and how to control mergers, taking into account firms equilibrium response to policy. Anti-competitive mergers benefit compe…

Previous research has been inconclusive as regards the effect of outward foreign direct investment (FDI) on domestic investments. In this article, we show that this inconclusiveness can be explained a…

This study explores how wage costs for high-skilled and less-skilled labor in host countries affect the level of affiliate activities conducted by foreign MNEs. We find support for vertical FDI, in th…

We investigate the occurrence of bubble-crash pricing patterns in laboratory financial markets with a mixture of experienced and inexperienced traders. We find that even with a minority of experienced…

This paper studies privatization policy in an international oligopoly. The argument that equal treatment of foreign investors will be detrimental to domestic welfare by shifting profits from domestic…

This paper tests the insiders’ dilemma hypothesis in a laboratory experiment. The insiders’ dilemma means that a profitable merger does not occur, because it is even more profitable for each firm to unil…

We analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment. When bribing costs are low, tha…

The knowledge-capital model (KC model), described in Markusen (2002), encompasses both market size (horizontal) as well as factor endowment (vertical) explanations to why multinational production occu…

We provide a possible explanation for the empirical puzzle that mergers often reduce profits, but raise share prices. If being an “insider” is better than being an “outsider”, firms may merge to preem…

Heterogeneous firms facing demand-induced price fluctuations imperfectly compete for heterogeneous workers. It is shown that unemployment may arise in equilibrium because of the combination of uncerta…

This study examines the impact of Anglo-American financial markets on CEO compensation. Starting from a sample of Norwegian and Swedish listed firms, we analyse this effect as manifested in the capita…

We develop a theoretical model in which whites mainly use private vehicles to commute whereas nonwhites use public transportation. We show that, for both whites and nonwhites, higher (time) distance t…

The growth effects of international financial liberalization and integration are investigated using the methodology and data developed by Rajan and Zingales (1998). The main result is that industries…

Cash‐Flow‐at‐Risk (CFaR) is the cash flow equivalent of Value‐at‐Risk (VaR), a measure widely used as the basis for risk management in financial institutions. Whereas VaR‐based systems specify the max…

This paper evaluates the welfare consequences of the failing firm defense (FFD) in the EU and U.S. merger laws. To this end, I combine an oligopoly model with an ‘endogenous valuations’ auction model.…

Workers can find a job either directly or through personal contacts. From this micro scenario, we derive an aggregate matching function that has the standard properties but fails to be homogeneous of d…

The major strand of finance literature understands market efficiency through the market's ability to process information into prices. Another strand of literature refers to the economists’ usual sense…

Due to underlying technological and organizational di erences, industries di er in their need for external ÿnance. Since services provided by the ÿnancial sector are largely immobile across countries,…

We consider policy issues regarding parallel imports (PIs) of brand-name pharmaceuticals in the European Union, where such trade is permitted. We develop a simple model in which an original manufactur…

Delinquents compete with each other in criminal activities but benefit from being friends with other criminals by learning and acquiring proper know‐how on the crime business. We study the subgame‐per…

This article provides a unified explanation for why blacks commit more crime, are located in poorer neighborhoods, and receive lower wages than whites. If everybody believes that blacks are more crimi…

The regional voting pattern of the Swedish European Union (EU)-membership referendum is analyzed to determine voters’ preferences over two fiscal regimes: an autonomous Sweden, or Sweden as part of th…

This paper determines the equilibrium market structure in an international oligopoly, where a state enterprise is sold at an auction. The paper suggests that high greenfield costs and high trade costs…

This article discusses the National Treatment (NT) obligation as applied in the GATT tax discrimination cases. The central thesis of the paper is that case-law has not clarified the interpretation of t…

In recent years, globalization and its consequences have become hotly debated issues. In Europe, non-governmental organizations like Attac have argued that free trade and free capital movements favor…

This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). Using a sample of firms with headquarters in Norway or…

Consulting firms (CFs) sell services on a project basis to many clients and must therefore continuously tender for new contracts. One frequently used strategy by CFs is to visit the clients in connect…

Value Based Management (VBM) has become a common tool for evaluating corporate strategies and projects from the perspective of shareholder value maximization, and can be an important input for corpora…

The new information and communication technology, ICT, induces households to take over tasks from firms and government agencies, using tools and systems provided by these very same organizations. The…

This paper aims to explain the spatial variations of crime, both between and within cities. Two types of mechanisms are put forward: Social interactions that stipulate that an individual is more likel…

The paper analyses the interaction between economic incentives and work norms in the context of social insurance. If the work norm is endogenous in the sense that it is weaker when the population shar…

We classify social security pension systems in three dimensions: actuarial versus non-actuarial, funded versus unfunded, and defined-benefit versus defined-contribution systems. Recent pension reforms…

In imperfectly competitive markets firms with high costs produce positive output. The market’s ability to minimize costs is also constrained by the fact that firms’ costs are often private information.…

We provide a cultural explanation to the phenomenon of corruption in the framework of an overlapping generations model with intergenerational transmission of values. We show that the economy has two s…

If protectionist trade policies aim to insure domestic industries against swings in world market prices, the development of financial markets could lead to trade liberalization. Likewise, trade libera…

In the traditional trade literature, there is a well-developed area analyzing the effect of growth on trade and its reflection on income growth. This literature developed already in the 1950s and 1960…

This paper analyzes the simultaneous relationship between R&D and foreign sales in Swedish multinational enterprises (MNEs). We argue that this two-way relationship should especially apply to mult…

Experiences of social policies during the first decades of the 20th century in Europe underline the important role of informal systems for income security and personal services at low levels of econom…

In Search of FDI-Transmitted R& D Spillovers: A Study Based on Swedish Data. — This paper analyzes empirically whether inward and outward foreign direct investment (FDI) work as channels for inter…

The paper examines the implications for wage bargaining of an important aspect of the ongoing reorganization of work – the move from occupational specialization toward multi-tasking. The analysis show…

This paper focuses on the role of corporate financial strategies to improve their market valuations and lower their cost of capital. The identification of successful strategies is accomplished within…

This paper analyzes a three-stage optimization problem in which a firm chooses (i) its technology, by deciding on a level of R&D, (ii) whether this technology is to be used in a domestic or a forei…

A number of cross-country comparisons do not find a robust negative relationship between government size and economic growth. In part, this may reflect the prediction in economic theory that a negativ…

This article argues that the body of foreign direct investment (FDI) literature in general and the ownership, location, and internalization (OLI) paradigm in particular would be enriched if finance-sp…

This paper considers a small open economy with an input–output industrial structure that creates vertical linkages and multiple equilibria. An imperfect labor market is introduced by assuming unionize…

In Capitalism, Socialism and Democracy Joseph A. Schumpeter concluded that socialism would eventually displace capitalism in Western democracies. This would come about as a result of the superior perf…

Mergers and acquisitions (M&A) is the dominant form of Foreign Direct Investment (FDI), but has only received scarce attention in the theory literature on trade and investment. This paper highligh…

Most econometric studies of equity market integration suggest that national markets are increasingly becoming part of a global equity market. As regards the extent of this integration, however, the re…

We analyse the effect on agglomeration tendencies of allowing multi‐region firms in a standard trade and location model, the core–periphery (CP) model developed by Kurgman (1991). The introduction of…

A unique database on individual proposals is used to analyse competition among consulting firms (CFs) for international projects. CFs, which sell services based on human capital, focus on developing c…

This paper analyzes empirically the relationship between R&D and growth. The estimated elasticity of per capita R&D expenditures with respect to domestic per capita incomes lies between 1.81 a…

The main result of this study is that a financial constraint may serve as a disciplining device on the internal efficiency of a firm, and the tougher the product market competition, the higher the dis…

This study uses data on Swedish multinationals to estimate cross‐elasticities of labor demand in different locations. With a vertical decomposition of the firm’s activities, whether there is substitut…

I study the evolution of rationality, using an indirect evolutionary approach, in which nature selects a decision-making procedure, and the procedure chooses actions in matching-games. The main result…

This paper examines equilibrium and stability in symmetric two-player cheap-talk games and specifically characterizes the set of neutrally stable outcomes in cheap-talk 2 × 2 coordination games. With…

The purpose of this article is to examine the effects of European integration on the location of investments by Swedish multinational corporations (MNCs). Evidence is presented about the extent to whi…

Most previous studies have found evidence at the aggregate level that female entrepreneurs underperform relative to their male counterparts. This study conducts a comprehensive test of this finding. T…

New information and communication technology (ICT) makes consumers better informed about available products, product quality and prices, which mitigates problems of asymmetric information. The entry o…

Sunk Costs, Firm Size, and Internationalization. — One strand of the industrial organization literature argues that outlays on sunk costs are endogenous in market expansion, implying an adaptive adjus…

The expected consumer’s surplus (ECS) is often used as a monetary measure of consumer welfare. Examples include the theory of regulation, competition policy, and price stabilization. This paper shows…

A quality-adjusted measure of labour is developed, where labour efficiency depends on firm training. This specification is integrated into a flexible neoclassical cost function, representing the firm'…

In a recent review article, Agell et al. (ALO) [Agell, J., Lindh, T., Ohlsson, H., 1997. Growth and the public sector: a critical review essay. European Journal of Political Economy 13, 33–52.] claim…

In the models of Young (1993, Econometrica 61, 57–84; 1993, J. Econ. Theory 59, 145–168), boundedly rational individuals are recurrently matched to play a game, and they play myopic best replies to th…

We incorporate transaction taxes in a housing market search model with endogeneous house prices and show that these taxes unambiguously create lock-in effects that reduce welfare. The lock-in effects…

This paper analyzes the interplay between social norms and economic incentives in the context of work decisions in the modem welfare state. We assume that to live off one's own work is a social norm,…

What forces determine national differences in the size and industry distribution of employment? We stress the role of the economic policy environment as determined by business taxes, employment securi…

The purpose of the present paper is twofold. First, we formulate a general method of identifying clusters of economic activity in a country or region. The methodology is based on generally available i…

In this paper it is argued that the size distribution of firms may largely be determined by institutional factors. This hypothesis is tested in an exploratory fashion by studying the evolution of the…

MUST (Macroeconomic Uncertainty Strategy) analysis can help identify the demand side of competitive intelligence. It is a key tool by which relevant economic variables can be identified for companies.…

National and International Spillovers from R&D: Comparing a Neoclassical and an Endogenous Growth Approach.— Two models where productivity growth is caused by spillovers from R&D are analyzed…

This paper analyzes how usual measures of revealed factor abundance (RFA), based on trade in merchandise, are affected by the existence of trade in services of intangible assets; trade that is mainly…

By perturbing symmetric coordination games à la Bryant [Bryant, J., 1983. Quarterly Journal of Economics 98, 525–528] we derive unique solutions, the noise-proof equilibria. Our results agree with the…

Three empirical models for the choice of entry mode in foreign direct investment are compared. In contrast to the models used in earlier studies where the entry decision is taken to be predetermined,…

Theoretical studies have shown that capital gains taxes in the housing market may create lock-in effects, but, so far, no empirical evidence has been presented regarding the size of these effects. For…

Based on the notion of affiliation a model is developed which suggests that laws which restrict the firm's flexibility to adjust its employment force resume in higher requirements on potential employe…

We compare the relation between foreign affiliate production and parent employment in US manufacturing multinationals with that in Swedish firms. US multinationals appear to have allocated some of the…

We use a specific-factor model to examine the conditions under which policy-makers are able to increase aggregate production of high-tech goods by production or R&D-subsidies in the short and long…