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Exploring Determinants of the Firm Boundary for Swedish Multinationals

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Author Info

  • Thede, Susanna

    ()
    (Department of Economics, Lund University)

  • Lindvert, Markus

    ()
    (Swedish Institute for Growth Policy Studies)

Abstract

This paper empirically examines the foreign internalisation decision of multinational corporations. The purpose of the paper is to identify determinants of the firm boundary, where within-boundary production takes the form of foreign direct investments (FDI) and outside-boundary production takes place through international outsourcing, with reference to recently developed general-equilibrium trade theories incorporating firm behaviour. The empirical investigation is performed for 2246 multinationals production engagements in 148 foreign countries under the 1997 to 2006 period. The primary contribution of the paper is the investigation of firm behaviour per se instead of industry level implications of firm behaviour.

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File URL: http://project.nek.lu.se/publications/workpap/Papers/WP09_2.pdf
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Bibliographic Info

Paper provided by Lund University, Department of Economics in its series Working Papers with number 2009:2.

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Length: 27 pages
Date of creation: 27 Feb 2009
Date of revision:
Handle: RePEc:hhs:lunewp:2009_002

Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Keywords: Foreign Direct Investment; International Outsourcing; Firm-level Evidence;

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  1. Massimo Motta & George Norman, 1993. "Does economic integration cause foreign direct investment?," Economics Working Papers 28, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Oliver Hart & John Moore, 1998. "Foundations of Incomplete Contracts," Harvard Institute of Economic Research Working Papers 1846, Harvard - Institute of Economic Research.
  3. Pol Antr�s, 2005. "Incomplete Contracts and the Product Cycle," American Economic Review, American Economic Association, vol. 95(4), pages 1054-1073, September.
  4. Ekholm, Karolina & Forslid, Rikard & Markusen, James R., 2003. "Export-Platform Foreign Direct Investment," CEPR Discussion Papers 3823, C.E.P.R. Discussion Papers.
  5. Antràs, Pol & Helpman, Elhanan, 2004. "Global Sourcing," CEPR Discussion Papers 4170, C.E.P.R. Discussion Papers.
  6. Segal, Ilya, 1999. "Complexity and Renegotiation: A Foundation for Incomplete Contracts," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 57-82, January.
  7. Grossman, Gene & Helpman, Elhanan, 2003. "Managerial Incentives and the International Organization of Production," CEPR Discussion Papers 3737, C.E.P.R. Discussion Papers.
  8. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact Of Outsourcing And High-Technology Capital On Wages: Estimates For The United States, 1979-1990," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 907-940, August.
  9. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2006. "Transfer Pricing by U.S.-Based Multinational Firms," NBER Working Papers 12493, National Bureau of Economic Research, Inc.
  10. Neary, J Peter, 2002. "Foreign Direct Investment and the Single Market," Manchester School, University of Manchester, vol. 70(3), pages 291-314, June.
  11. Barbara Spencer, 2005. "International outsourcing and incomplete contracts," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1107-1135, November.
  12. Slaughter, Matthew J., 2000. "Production transfer within multinational enterprises and American wages," Journal of International Economics, Elsevier, vol. 50(2), pages 449-472, April.
  13. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-45, May.
  14. repec:hrv:faseco:4784029 is not listed on IDEAS
  15. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2004. "Governance Matters III: Governance Indicators for 1996, 1998, 2000, and 2002," World Bank Economic Review, World Bank Group, vol. 18(2), pages 253-287.
  16. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
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