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The economic analysis of multinationals and foreign direct investment: a review

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  • María C. Latorre

    (Universidad Complutense de Madrid)

Abstract

This article provides an up-to-date, comprehensive synthesis and evaluation of the existing literatura on multinational firms and foreign direct investment. Unlike most previous reviews it combines severalinsights showing their inconsistencies and complementarities. Through a chronological description it presents the main strands since the earliest perfect competition studies from the 1960s till some new recent contributions such as the knowledge-capital model, heterogeneous firms models, and internalisation issues. The paper also offers a new perspective, by reviewing the available computable general equilibrium models that include multinationals and foreign direct investment.

Suggested Citation

  • María C. Latorre, 2009. "The economic analysis of multinationals and foreign direct investment: a review," Hacienda Pública Española / Review of Public Economics, IEF, vol. 191(4), pages 97-126, December.
  • Handle: RePEc:hpe:journl:y:2009:v:191:i:4:p:97-126
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    Cited by:

    1. Zhou, Jing & Latorre, María C., 2015. "FDI in China and global production networks: Assessing the role of and impact on big world players (East Asia, Japan, EU28 and U.S.)," MPRA Paper 62297, University Library of Munich, Germany.
    2. Latorre, María C., 2016. "A CGE Analysis of the Impact of Foreign Direct Investment and Tariff Reform on Female and Male Workers in Tanzania," World Development, Elsevier, vol. 77(C), pages 346-366.
    3. María C. Latorre, 2013. "On the Differential Behaviour of National and Multinational Firms: A Within- and Across-sectors Approach," The World Economy, Wiley Blackwell, vol. 36(10), pages 1294-1317, October.
    4. Oscar Bajo-Rubio & Carmen D Mora, 2015. "On the employment effects of outward FDI: the case of Spain, 1995-2011," Applied Economics, Taylor & Francis Journals, vol. 47(21), pages 2127-2141, May.
    5. Castillo-Murciego, Ángela & López-Laborda, Julio, 2019. "The effect of double taxation treaties and territorial tax systems on foreign direct investment: Evidence for Spain," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW), vol. 13, pages 1-33.
    6. Gómez-Plana Antonio G. & Latorre María C., 2019. "Digitalization, Multinationals and Employment: An Empirical Analysis of Their Causal Relationships," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(3), pages 399-439, June.
    7. Latorre, María C. & Yonezawa, Hidemichi, 2018. "Stopped TTIP? Its potential impact on the world and the role of neglected FDI," Economic Modelling, Elsevier, vol. 71(C), pages 99-120.
    8. Latorre, María C. & Hosoe, Nobuhiro, 2016. "The role of Japanese FDI in China," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 226-241.
    9. Zhou, Jing & Latorre, María C., 2014. "How FDI influences the triangular trade pattern among China, East Asia and the U.S.? A CGE analysis of the sector of Electronics in China," Economic Modelling, Elsevier, vol. 44(S1), pages 77-88.
    10. Gómez-Plana, Antonio G. & Latorre, María C., 2014. "When multinationals leave: A CGE analysis of the impact of divestments," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW), vol. 8, pages 1-41.
    11. Latorre, Maria C., 2014. "CGE analysis of the impact of foreign direct investment and tariff reform on female and male wages," Policy Research Working Paper Series 7073, The World Bank.
    12. Maria C Latorre & Hidemi hi Yonezawa, 2016. "An innovative CGE assessment of the impact of the TTIP including multinationals and Foreign Direct Investment," EcoMod2016 9333, EcoMod.
    13. Latorre, María C. & Olekseyuk, Zoryana & Yonezawa, Hidemichi & Robinson, Sherman, 2020. "Making sense of Brexit losses: An in-depth review of macroeconomic studies," Economic Modelling, Elsevier, vol. 89(C), pages 72-87.
    14. Zhou, Jing & Latorre, María C., 2013. "The impact of FDI on the production networks between China and East Asia and the role of the U.S. and ROW as final markets," MPRA Paper 51384, University Library of Munich, Germany.
    15. Latorre, María C. & Yonezawa, Hidemichi & Zhou, Jing, 2018. "A general equilibrium analysis of FDI growth in Chinese services sectors," China Economic Review, Elsevier, vol. 47(C), pages 172-188.

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    More about this item

    Keywords

    Multinational enterprises; Foreign direct investment; Computable general equilibrium models.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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