This paper attempts to integrate the financial and real decisions of the multinational corporation. Our study shows that increased taxation by home countries like the U.S.A would promote employment abroad at the expense of the home country. Similarly, increased taxation of MNCs in the host country would reduce employment and investment abroad. Our analysis also indicates that a devaluation promotes employment abroad but not at the expense of the home country. A devaluation of the home country's currency reduces the outflow of repatriated earnings from the host country. This has obvious balance of payments implications for the home country.
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Article provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.
Volume (Year): 24 (1989) Issue (Month): 2 (July) Pages: 207-223 Download reference. The following formats are available: HTML
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