This paper analyses the effects of the Single European Market and Swedish Investment liberalisation on the structure of Swedish multinationals with their EU affiliates. The empirical results suggest that the determinants associated with horizontal and vertical multinationals have become increasingly relevant between 1974 and 1994. Horizontal multinationals are increasingly deterred by large plant-level economies of scale, increasingly associated with large trade costs and relative factor endowment similarities, while vertical multinationals are increasingly associated with relative factor endowment differences. This suggests that European integration has increased competitive pressures to enhance efficiency in exploiting economies of scale, and specialisation according to comparative advantages.
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Length: 32 pages Date of creation: 27 Dec 2001 Date of revision: Handle: RePEc:hhs:hastef:0483
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Find related papers by JEL classification: F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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