In the literature on international marketing it is generally agreed upon that the location of production has considerable effects on consumers' beliefs about product quality. In this paper, a rational choice explanation for this fact is offered. The 'Made-in' label may be especially relevant as a signal if sinking resources before entering the market is not posible due to capital market constraints. Furthermore, potential implications for geographic labeling laws are explored. Path-dependency and transaction cost theories of the firm are synthesized to explain internalization, in which internalization depends on various combinations of private information, transaction costs and complementarities in the production function.
Manning rules specify the number of workers assigned to a machine or operation.
In this paper, we extend the analysis to endogenous capital formation. He analyzes how in international lending there can be equilibria with credit rationing and with loan pushing. He, and in fact the international credit literature, does not study how one of these regimes can give way to the oter although this is crucial for his suggested interpretation of the debt crisis. In this brief note, the conditions for such a transition from loan pushing to credit rationing are formulated within the framework of Basu's model.