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Optimal Integration: Strategies for the Multinational Firm Author info | Abstract | Publisher info | Download info | Related research | Statistics Grossman, Gene
Helpman, Elhanan
Szeidl, Adam
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We examine integration strategies of multinational firms that face a rich array of choices of international organization. Each firm in an industry must provide headquarter services from its home country, but can produce its intermediate inputs and conduct assembly operations in one or more of three locations. We study the equilibrium choices of firms that differ in productivity levels, focusing on the role that industry characteristics such as the fixed costs of foreign subsidiaries, the cost of transporting intermediate and final goods, and the regional composition of the consumer market play in determining the optimal integration strategies. In the process, we identify three distinct ‘complementarities’ that link firms’ foreign investment decisions for different stages of production.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
4477.
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Date of creation: Jul 2004Date of revision:
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Keywords: direct foreign investment intra-firm trade multinational corporations vertical integration Other versions of this item:
Article Paper Gene M. Grossman & Elhanan Helpman & Adam Szeidl, 2003.
"Optimal Integration Strategies for the Multinational Firm ,"
NBER Working Papers
10189, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Gene M. Grossman & Elhanan Helpman & Adam Szeidl, 2003.
"Optimal Integration Strategies for the Multinational Firm ,"
Working Papers
142, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
[Downloadable!] Gene M. Grossman & Elhanan Helpman & Adam Szeidl, 2003.
"Optimal Integration Strategies for the Multinational Firm ,"
Harvard Institute of Economic Research Working Papers
2024, Harvard - Institute of Economic Research.
[Downloadable!] Find related papers by JEL classification: F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.:
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Gene M. Grossman & Elhanan Helpman, 2002.
"Outsourcing versus FDI in Industry Equilibrium? ,"
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1965, Harvard - Institute of Economic Research.
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Grossman, Gene & Helpman, Elhanan, 2003.
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Elhanan Helpman & Gene M. Grossman, 2002.
"Managerial Incentives and the International Organization of Production ,"
NBER Working Papers
9403, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Gene M. Grossman & Elhanan Helpman, 2002.
"Managerial Incentives and the International Organization of Production ,"
Working Papers
147, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
[Downloadable!] Gene M. Grossman & Elhanan Helpman, 2002.
"Managerial Incentives and the International Organization of Production ,"
Harvard Institute of Economic Research Working Papers
1987, Harvard - Institute of Economic Research.
[Downloadable!] Grossman, Gene M. & Helpman, Elhanan, 2004.
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"Export-Platform Foreign Direct Investment ,"
NBER Working Papers
9517, National Bureau of Economic Research, Inc.
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Ekholm, Karolina & Forslid, Rikard & Markusen, James R., 2003.
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"Multinational firms and the new trade theory ,"
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Other versions: Helpman, Elhanan, 1984.
"A Simple Theory of International Trade with Multinational Corporations ,"
Journal of Political Economy ,
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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CEPR Discussion Papers
5933, C.E.P.R. Discussion Papers.
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Post-Print
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Fabrice Defever, 2006.
"Functional fragmentation and the location of multinational firms in the enlarged Europe ,"
Université Paris1 Panthéon-Sorbonne, Post-Print
halshs-00118808_v1, HAL.
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"Functional fragmentation and the location of multinational firms in the enlarged Europe ,"
Cahiers de la Maison des Sciences Economiques
bla06052, Université Panthéon-Sorbonne (Paris 1).
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Regional Science and Urban Economics ,
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J. Bradford Jensen & Andrew Bernard & Peter Schott, 2005.
"Importers, Exporters, and Multinationals: A Portrait of Firms in the U.S. that Trade Goods ,"
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