Multinational Enterprises and Tobin´s q: The Implications for Foreign Direct Investment
This paper constructs a theoretical model of investment decision abroad supporting the idea that the Multinational Enterprises’ internalization decision is influenced by the capital installation cost. This modification alters MNE’s investment behavior. Using the idea that capital mobility across countries is associated with the capital installation cost then the firm’s maximization problem may also incorporate the Tobin’s q in a modified fashion.
Volume (Year): 1 (2004)
Issue (Month): 2 ()
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- Salvador Barrios & Holger Görg & Eric Strobl, .
"Multinational Enterprises and New Trade Theory: Evidence for the Convergence Hypothesis,"
- Salvador Barrios & Holger GÃ¶rg & Eric Strobl, 2003. "Multinational Enterprises and New Trade Theory: Evidence for the Convergence Hypothesis," Open Economies Review, Springer, vol. 14(4), pages 397-418, October.
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in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 71-98
National Bureau of Economic Research, Inc.
- James R. Markusen & Keith E. Maskus, 1999. "Multinational Firms: Reconciling Theory and Evidence," NBER Working Papers 7163, National Bureau of Economic Research, Inc.
- De Santis, Roberto A. & Anderton, Robert & Hijzen, Alexander, 2004. "On the determinants of euro area FDI to the United States: the knowledge- capital-Tobin's Q framework," Working Paper Series 0329, European Central Bank.
- Sivadasan Jagadeesh, 2009. "Barriers to Competition and Productivity: Evidence from India," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-66, September.
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