Economics of Scope, Agglomeration and Location of the Multinational Firm
AbstractA classification of the locational patterns of firms (with economies of scope present) is outlined, in order to cast light on the location of the multiplant, multinational firm. This is driven by three forces: economies of scope that follow from the co-location of different activities; transportation costs of the final good; and factor mobility costs. It is concluded that the single-plant firm prevails when spatial economies of scope are strong in relation to either transportation or mobility costs. The vertical (horizontal) multiplant firm emerges when mobility costs of factors (transportation costs on the final good) are high. These two kinds of spatial costs, which are mutually exclusive, favor the formation of multinational firms.
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Bibliographic InfoPaper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2004/04.
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC
Economies of scope; Economies of agglomeration; Multiplant firms; Multinational firms.;
Find related papers by JEL classification:
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-30 (All new papers)
- NEP-GEO-2004-09-30 (Economic Geography)
- NEP-URE-2004-09-30 (Urban & Real Estate Economics)
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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