The emergence of multinational enterprises: Simulation results
In the last decades, foreign direct investment (FDI) has increased strongly among industrialised countries. U.S. companies were the first to set up foreign affiliates followed later by companies from smaller industrialised countries. This paper develops a general equilibrium model of bidirectional intra-industry FDI between industrialised countries, in which this specific time pattern emerges. In contrast to the existing literature on FDI, this paper shows that falling transport costs first lead to increased FDI activities and only later to decreased FDI. Additionally, FDI is more likely to occur in industries with differentiated products, higher scale economies on company relative to plant level, smaller inputs of intermediate goods and more differentiated intermediate goods.
|Date of creation:||1998|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 431 8814-1
Fax: +49 431 85853
Web page: http://www.ifw-kiel.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Markusen, James R. & Venables, Anthony J., 1998.
"Multinational firms and the new trade theory,"
Journal of International Economics,
Elsevier, vol. 46(2), pages 183-203, December.
- S. Lael Brainard, 1993. "A Simple Theory of Multinational Corporations and Trade with a Trade-Off Between Proximity and Concentration," NBER Working Papers 4269, National Bureau of Economic Research, Inc.
- Panic, M., 1997. "The end of the nation state?," Structural Change and Economic Dynamics, Elsevier, vol. 8(1), pages 29-44, March.
- Markusen, James R., 1984. "Multinationals, multi-plant economies, and the gains from trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 205-226, May.
When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:900. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny)
If references are entirely missing, you can add them using this form.