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The Single European Market, Swedish Investment Liberalisation, and Horizontal and Vertical Multinationals


  • Mathä, Thomas

    () (European Institute of Japanese Studies)


This paper analyses the effects of the Single European Market and Swedish Investment liberalisation on the structure of Swedish multinationals with their EU affiliates. The empirical results suggest that the determinants associated with horizontal and vertical multinationals have become increasingly relevant between 1974 and 1994. Horizontal multinationals are increasingly deterred by large plant-level economies of scale, increasingly associated with large trade costs and relative factor endowment similarities, while vertical multinationals are increasingly associated with relative factor endowment differences. This suggests that European integration has increased competitive pressures to enhance efficiency in exploiting economies of scale, and specialisation according to comparative advantages.

Suggested Citation

  • Mathä, Thomas, 2001. "The Single European Market, Swedish Investment Liberalisation, and Horizontal and Vertical Multinationals," SSE/EFI Working Paper Series in Economics and Finance 483, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0483

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    More about this item


    Single European Market; Swedish Investment Liberalisation; Country Size; Factor Endowments; Horizontal & Vertical Multinationals;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • 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

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