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Multinational firms, technology and location

  • Norback, Pehr-Johan

This paper analyzes a three-stage optimization problem in which a firm chooses (i) its technology, by deciding on a level of R&D, (ii) whether this technology is to be used in a domestic or in a foreign plant and (iii) the quantity produced and sold on the market. If technology transfer costs are low, "high-tech" or R&D-intensive firms tend to produce abroad. At higher technology transfer costs, high-tech firms tend to export. An empirical analysis using a data set of Swedish multinational firms, confirms the latter prediction.

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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 54 (2001)
Issue (Month): 2 (August)
Pages: 449-469

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Handle: RePEc:eee:inecon:v:54:y:2001:i:2:p:449-469
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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