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Firm heterogeneity and the structure of U.S. multinational activity

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  • Yeaple, Stephen Ross

Abstract

We use firm-level data for U.S. multinational enterprises (MNEs) and the model of firm heterogeneity presented in Helpman, Melitz, and Yeaple [Helpman, E., Melitz, M., Yeaple, S., 2004. Exports versus FDI with heterogeneous firms. The American Economic Review 94 (1), 300-316.] to make four empirical contributions. First, we show that the most productive U.S. firms invest in a larger number of foreign countries and sell more in each country in which they operate. Second, we assess the importance of firm heterogeneity in the structure of MNE activity. Third, we use the model to identify the mechanisms through which country characteristics affect the structure of MNE activity. Finally, we assess the model's shortcomings in order to inform the development of new theory.

Suggested Citation

  • Yeaple, Stephen Ross, 2009. "Firm heterogeneity and the structure of U.S. multinational activity," Journal of International Economics, Elsevier, vol. 78(2), pages 206-215, July.
    • Handle: RePEc:eee:inecon:v:78:y:2009:i:2:p:206-215
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    References listed on IDEAS

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    1. Richard Baldwin & James Harrigan, 2011. "Zeros, Quality, and Space: Trade Theory and Trade Evidence," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 60-88, May.
    2. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
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