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Home market effect versus multinationals

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  • TOULEMONDE, Eric

Abstract

In this paper, based on the cyclic scheduling formulation of Schilling and Pantelides [22], we propose a continuous time mixed integer linear programming (MILP) formulation for the cyclic scheduling of a mixed plant, i.e. a plant composed of batch and continuous tasks. The cycle duration is a variable of the model and the objective is to maximize productivity. By using strengthening techniques and the analysis of small polytopes related to the problem formulation, we strengthen the initial formulation by tightening some initial constraints and by adding valid inequalities. We show that this strengthened formulation is able to solve moderate size problems quicker than the initial one. However, for real size cases, it remains difficult to obtain the optimal solution of the scheduling problem quickly. Therefore, we introduce MILP-based heuristic methods in order to solve these larger instances, and show that they can provide quite good feasible solutions quickly.

Suggested Citation

  • TOULEMONDE, Eric, 2007. "Home market effect versus multinationals," CORE Discussion Papers 2007046, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2007046
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    References listed on IDEAS

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    1. Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, vol. 87(4), pages 520-544, September.
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    4. Kind, Hans Jarle & Knarvik, Karen Helene Midelfart & Schjelderup, Guttorm, 2000. "Competing for capital in a 'lumpy' world," Journal of Public Economics, Elsevier, pages 253-274.
    5. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
    6. Ludema, Rodney D. & Wooton, Ian, 2000. "Economic geography and the fiscal effects of regional integration," Journal of International Economics, Elsevier, pages 331-357.
    7. Head, Keith & Mayer, Thierry & Ries, John, 2002. "On the Pervasiveness of Home Market Effects," Economica, London School of Economics and Political Science, vol. 69(275), pages 371-390, August.
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    Cited by:

    1. Kenmei Tsubota, "undated". "Location and organization choice of firms," KIER Working Papers 679, Kyoto University, Institute of Economic Research.

    More about this item

    Keywords

    globalization; economic geography; trade costs; multinational firms; home market effect;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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