This paper examines the behavior of the regret-averse multinational firm under exchange rate uncertainty. The multinational firm simultaneously sells in the home market and exports to a foreign country. We characterize the multinational firm's regret-averse preferences by a modified utility function that includes disutility from having chosen ex-post suboptimal alternatives. The extent of regret depends on the difference between the actual home currency profit and the maximum home currency profit attained by making the optimal production and export decisions had the multinational firm observed the true realization of the random spot exchange rate. We show that the conventional results that the multinational firm optimally produces less, sells more domestically, and export less abroad under uncertainty than under certainty holds if the multinational firm is not too regret averse. Using a simple binary model wherein the random spot exchange rate can take on either a low value or a high value with positive probability, we show that the multinational firm may optimally produce more, sell less domestically, and export more abroad under uncertainty than under certainty, particularly when the multinational firm is sufficiently regret averse and the low spot exchange rate is very likely to prevail.

This paper examines the behavior of the regret-averse multinational firm under exchange rate uncertainty. The multinational firm simultaneously sells in the home market and exports to a foreign country. We characterize the multinational firm's regret-averse preferences by a modified utility function that includes disutility from having chosen ex-post suboptimal alternatives. The extent of regret depends on the difference between the actual home currency profit and the maximum home currency profit attained by making the optimal production and export decisions had the multinational firm observed the true realization of the random spot exchange rate. We show that the conventional results that the multinational firm optimally produces less, sells more domestically, and export less abroad under uncertainty than under certainty holds if the multinational firm is not too regret averse. Using a simple binary model wherein the random spot exchange rate can take on either a low value or a high value with positive probability, we show that the multinational firm may optimally produce more, sell less domestically, and export more abroad under uncertainty than under certainty, particularly when the multinational firm is sufficiently regret averse and the low spot exchange rate is very likely to prevail.

Die vorliegende Dissertation besteht aus vier Aufsätzen, die sich mit Fragen des Außenhandels und der Arbeitsmarktökonomie auseinandersetzen. Der erste Aufsatz untersucht in einem internationalen Oligopol die Interaktion zwischen Handelsliberalisierung, Produkt- und Prozessinnovationen und der relativen Nachfrage nach niedrig qualifizierten Arbeitnehmern. Der Abbau von Handelsschranken führt zu einer Verschärfung des Wettbewerbs, auf die die konkurrierenden Firmen reagieren, indem sie ihre Investitionen in Produkt- und Prozessinnovationen ausweiten. Infolgedessen sinkt die Nachfrage nach niedrig qualifizierten Arbeitnehmern. Der zweite Aufsatz analysiert die Wirkung eines einseitigen Mindestlohnes in einem Zwei-Länder-Modell, in dem Firmen den ausländischen Markt entweder durch Exporte oder durch lokale Tochterfirmen bedienen. Eine Liberalisierung des Handels erhöht die negativen Beschäftigungseffekte von Mindestlöhnen. Dagegen begrenzt die Existenz von multinationalen Unternehmen den durch Mindestlöhne verursachten Arbeitsplatzabbau. Der dritte Aufsatz untersucht, wie sich kollektive Tarifverhandlungen bei freiem Marktzutritt auf die Produktivität und den wirtschaftlichen Erfolg von heterogenen Firmen auswirken. Zentrale Lohnverhandlungen verschärfen den Auswahlprozess und erhöhen die durchschnittliche Produktivität und den Gewinn überlebender Firmen. Stattdessen begünstigen dezentrale Tarifverhandlungen weniger produktive Firmen. Sind die Firmen internationalem Wettbewerb ausgesetzt, so können auch zentrale Tarifverhandlungen die Produktivität reduzieren. Der vierte Beitrag untersucht empirisch die Auswirkungen von Offshoring auf Arbeiterflüsse in Deutschland. Während Offshoring die Stabilität von Beschäftigungsverhältnissen in der verarbeitenden Industrie nicht beeinflusst, geht es einher mit einer Zunahme der Beschäftigungsstabilität im Dienstleistungssektor. Die Effekte von Offshoring hängen ferner stark vom Alter und der Bildung des einzelnen Arbeitnehmers ab. / This dissertation consists of four essays that contribute to the literature on international trade and labour markets. The first essay studies the interaction between economic integration, product and process innovation, and relative skill demand in a model of international oligopoly. As trade barriers are dismantled foreign competition intensifies. Competing enterprises respond by investing more aggressively in both product and process innovation. The relative demand for unskilled workers decreases as a result. The second essay studies labour market outcomes in a model of intra-industry trade between a rigid-wage Europe and a flexible-wage America. Firms can choose to serve the foreign market either through exports or through local subsidiaries. The essay demonstrates that the adverse employment effects of a unilateral wage floor increase significantly when trade barriers are removed. Multinational firms mitigate the adverse employment effects of one-sided wage rigidity. The third essay analyses how different unionisation structures affect firm productivity and firm performance in a monopolistic competition model with heterogeneous firms and free entry. While centralised bargaining induces tougher selection among heterogeneous producers and increases average productivity and profit levels, firm-level bargaining allows less productive entrants to remain in the market. The positive effect of centralised bargaining on average productivity can, however, be overturned when firms face international low-wage competition. Finally, the fourth chapter analyses empirically the effect of offshoring on workers'' labour market transitions in Germany. The results suggest that the effects of offshoring are strongly age- and skill-specific and also vary between sectors. While offshoring does not affect overall job stability in the manufacturing sector, it is associated with an increase in overall job stability in the service sector.