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Do Multinationals Transplant their Business Model?

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  • Marin, Dalia
  • Verdier, Thierry
  • Rousová, Linda

Abstract

What determines whether or not multinational firms transplant their mode of organisation to other countries? We embed the theory of knowledge hierarchies in an industry equilibrium model of monopolistic competition to examine how the economic environment may affect the decision to transplant the business organization. We test the theory with original data of 660 multinational firms and 2200 of their affiliates. Three factors stand out: a competitive host market, the corporate culture of the multinational firm, and the transfer of an innovative technology. These factors increase the respective probabilities of organisational transfer by 9, 18, and 27 percentage points.

Suggested Citation

  • Marin, Dalia & Verdier, Thierry & Rousová, Linda, 2013. "Do Multinationals Transplant their Business Model?," CEPR Discussion Papers 9500, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9500
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    Cited by:

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    2. Cagatay Bircan, 2013. "Foreign direct investment and wages: does the level of ownership matter?," Working Papers 157, European Bank for Reconstruction and Development, Office of the Chief Economist.
    3. Nguyen, Quyen T.K. & Almodóvar, Paloma & Wei, Ziyi, 2022. "Intra-firm and arm’s length export propensity and intensity of MNE foreign subsidiaries," Journal of Business Research, Elsevier, vol. 145(C), pages 288-308.
    4. Marcus Biermann, 2022. "The role of management practices in acquisitions and the FDI location decision," Review of International Economics, Wiley Blackwell, vol. 30(1), pages 137-165, February.

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    More about this item

    Keywords

    Organisational economics of multinational firms; Trade and organisations; The theory of the firm; Organisational transfer between countries;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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