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The effects of multinationals on host economies: A CGE approach

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  • Latorre, María C.
  • Bajo-Rubio, Oscar
  • Gómez-Plana, Antonio G.

Abstract

This paper offers a new perspective regarding the effects on a host economy of the entry of multinational enterprises (MNEs). We use a computable general equilibrium (CGE) approach, through a version of the Global Trade Analysis Project (GTAP) model extended to incorporate MNEs. The analysis is applied to the Czech Republic, a country that has received substantial inflows of foreign direct investment in the last few years. A special attention has been paid to the issue of profit repatriation. We find that the negative effects of profit repatriation are sizeable, and might even offset the positive impact of the entry of MNEs.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 26 (2009)
Issue (Month): 5 (September)
Pages: 851-864

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Handle: RePEc:eee:ecmode:v:26:y:2009:i:5:p:851-864

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Multinational enterprises Foreign direct investment Computable general equilibrium Profit repatriation Czech Republic;

References

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Citations

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Cited by:
  1. Hiroshi Sakamoto, 2011. "CGE Analysis of Regional Policy in Northern Kyushu Area," ERSA conference papers ersa10p383, European Regional Science Association.
  2. Gómez Plana, Antonio G. & Latorre, María C., 2013. "When multinationals leave: A CGE analysis of the impact of divestments," Economics Discussion Papers 2013-45, Kiel Institute for the World Economy.
  3. Zhou, Jing & Latorre, María C., 2013. "The impact of FDI on the production networks between China and East Asia and the role of the U.S. and ROW as final markets," MPRA Paper 51384, University Library of Munich, Germany.
  4. Hiroshi SAKAMOTO, 2012. "CGE Analysis of Transportation Cost and Regional Economy: East Asia and Northern Kyushu," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 121-140, June.
  5. Álvarez-Martínez, María Teresa & Polo, Clemente, 2012. "A general equilibrium assessment of external and domestic shocks in Spain," Economic Modelling, Elsevier, vol. 29(6), pages 2486-2493.
  6. María C. Latorre, 2009. "The economic analysis of multinationals and foreign direct investment: a review," Hacienda Pública Española, IEF, vol. 191(4), pages 97-126, December.
  7. Nobuhiro Hosoe, 2013. "Japanese Manufacturing Facing the Power Crisis after Fukushima: A Dynamic Computable General Equilibrium Analysis with Foreign Direct Investment," GRIPS Discussion Papers 13-01, National Graduate Institute for Policy Studies.

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