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The Time Pattern of the Internationalization of Production

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  • Jö Kleinert

Abstract

This paper offers an explanation for the development of international trade, foreign direct investment and the activity of multinational companies in developed countries after the Second World War. A two-country-two-sector-one-factor general equilibrium model is set up and applied in an evolutionary framework. The model features the stylized facts: exports and production abroad increase with falling distance costs, exports increase earlier than production abroad and companies in larger countries internationalize their production earlier than their competitors in smaller countries do. Copyright Verein fü Socialpolitik and Blackwell Publishers Ltd 2001.

Suggested Citation

  • Jö Kleinert, 2001. "The Time Pattern of the Internationalization of Production," German Economic Review, Verein für Socialpolitik, vol. 2(1), pages 79-98, February.
  • Handle: RePEc:bla:germec:v:2:y:2001:i:1:p:79-98
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    References listed on IDEAS

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    1. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 857-880.
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    4. repec:hhs:iuiwop:430 is not listed on IDEAS
    5. Markusen, James R., 1984. "Multinationals, multi-plant economies, and the gains from trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 205-226, May.
    6. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72.
    7. Fujita, Masahisa & Mori, Tomoya, 1997. "Structural stability and evolution of urban systems," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 399-442, August.
    8. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    9. Volker Nitsch, 2000. "National borders and international trade: evidence from the European Union," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 1091-1105, November.
    10. Markusen, James R & Maskus, Keith E, 2002. "Discriminating among Alternative Theories of the Multinational Enterprise," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 694-707, November.
    11. Markusen, James R. & Venables, Anthony J., 1998. "Multinational firms and the new trade theory," Journal of International Economics, Elsevier, vol. 46(2), pages 183-203, December.
    12. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-471, June.
    13. S. Lael Brainard, 1993. "A Simple Theory of Multinational Corporations and Trade with a Trade-Off Between Proximity and Concentration," NBER Working Papers 4269, National Bureau of Economic Research, Inc.
    14. David L. Hummels & Dana Rapoport & Kei-Mu Yi, 1998. "Vertical specialization and the changing nature of world trade," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 79-99.
    15. Fujita, Masahisa & Krugman, Paul & Mori, Tomoya, 1999. "On the evolution of hierarchical urban systems1," European Economic Review, Elsevier, vol. 43(2), pages 209-251, February.
    16. Kleinert, Jörn, 1998. "The emergence of multinational enterprises: Simulation results," Kiel Working Papers 900, Kiel Institute for the World Economy (IfW).
    17. Jose Campa & Linda S. Goldberg, 1997. "The Evolving External Orientation of Manufacturing Industries: Evidence from Four Countries," NBER Working Papers 5919, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Marián Dinga & Vilma Dingová, 2011. "Currency Union and Investment Flows: Estimating the Euro Effect on FDI," Working Papers IES 2011/25, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2011.
    2. Fernanda Ricotta, 2009. "Trade In Intermediate Goods In Italian Manufacturing Industries," Working Papers 200915, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    3. Brooks, Douglas H. & Roland-Holst, David & Zhai, Fan, 2008. "Behavioral and empirical perspectives on FDI: International capital allocation across Asia," Journal of Asian Economics, Elsevier, vol. 19(1), pages 40-52, February.
    4. Buch, Claudia M. & Kokta, Robert M. & Piazolo, Daniel, 2003. "Foreign direct investment in Europe: Is there redirection from the South to the East?," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 94-109, March.
    5. Toubal, Farid & Kleinert, Jörn & Buch, Claudia M., 2003. "Determinants of German FDI: New Evidence from Micro-Data," Discussion Paper Series 1: Economic Studies 2003,09, Deutsche Bundesbank.

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