Organization of Multinational Activities and Ownership Structure
Abstract
We develop a model in which multinational investors decide about the modes of organization, the locations of production, and the markets to be served. Foreign investments are driven by market-seeking and cost-reducing motives. We further assume that investors face costs of control that vary among sectors and increase in distance. The results show that (i) production intensive sectors are more likely to operate a foreign business independent of the investment motive, (ii) that distance may have a non-monotonous effect on the likelihood of horizontal investments, and (iii) that globalization, if understood as reducing distance, leads to more integration.Download Info
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Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 98.Length:
Date of creation: Feb 2006
Date of revision:
Handle: RePEc:trf:wpaper:98
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Keywords: Multinational firms; Joint ventures; Distance; Technology spillovers; Ownership structure;Other versions of this item:
- Mugele, Christian & Schnitzer, Monika, 2008. "Organization of multinational activities and ownership structure," International Journal of Industrial Organization, Elsevier, vol. 26(6), pages 1274-1289, November.
- Mugele, Christian & Schnitzer, Monika, 2006. "Organization of Multinational Activities and Ownership Structure," CEPR Discussion Papers 5592, C.E.P.R. Discussion Papers.
- Mugele, Christian & Schnitzer, Monika, 2006. "Organization of Multinational Activities and Ownership Structure," Discussion Papers in Economics 893, University of Munich, Department of Economics.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-11 (All new papers)
- NEP-BEC-2006-03-11 (Business Economics)
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- 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.
- Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2011.
"Mergers and capital flight in unionised oligopolies: Is there scope for a "national champion" policy?,"
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Elsevier, vol. 20(2), pages 325-341, April.
- Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2008. "Mergers and capital flight in unionised oligopolies: Is there scope for a 'national champion' policy?," Working Papers in Economics 02/08, University of Bergen, Department of Economics.
- Kjell Erik Lommerud & Frode Meland & Odd Rune Straume, 2008. "Mergers and capital flight in unionised oligopolies: Is there scope for a 'national champion' policy?," NIPE Working Papers 10/2008, NIPE - Universidade do Minho.
- 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, Università degli Studi di Roma "La Sapienza".
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"Multinationals, Minority Ownership and Tax-Efficient Financing Structures,"
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2008/19, Department of Finance and Management Science, Norwegian School of Economics.
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