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Organization of multinational activities and ownership structure

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  • Mugele, Christian
  • Schnitzer, Monika

Abstract

We develop a model of a multinational firm serving a foreign market that needs to decide about the location of production and the optimal ownership structure. We study how the location decision and the ownership choice interact, how these decisions are affected by (cultural) distance and how they depend on industry characteristics. Our analysis shows that (i) distance leads to less integration in low tech, but tends to lead to more integration in high tech industries, (ii) distance may have a non-monotonous effect on the likelihood of horizontal investments as opposed to exports, and (iii) marketing intensive industries are relatively more likely to produce close to their customers.

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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 19200.

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Date of creation: 2008
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Publication status: Published in International Journal of Industrial Organization 6 26(2008): pp. 1274-1289
Handle: RePEc:lmu:muenar:19200

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References

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  41. repec:rus:hseeco:121605 is not listed on IDEAS
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Cited by:
  1. Schindler, Dirk & Schjelderup, Guttorm, 2008. "Multinationals, Minority Ownership and Tax-Efficient Financing Structures," Discussion Papers 2008/19, Department of Business and Management Science, Norwegian School of Economics.
  2. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2011. "Mergers and capital flight in unionised oligopolies: Is there scope for a "national champion" policy?," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 325-341, April.
  3. Leo A. Grunfeld & FRANCESCA SANNA-RANDACCIO, 2009. "Cross Border M&A: Who Buys Whom When Market Size and Technology Levels Differ?," DIS Technical Reports 2009-12, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
  4. Hansen, Thorsten, 2010. "Innovation and the International Firm Structure: Theory and Evidence from German Firm-Level Data," Discussion Papers in Economics 11464, University of Munich, Department of Economics.

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