IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Size, Geography, and Multinational Production

  • Natalia Ramondo

    ()

    (Economics University of Chicago)

This paper analyzes the cross-country allocation and volume of multinational production, quantifies its barriers, and assesses its impact on welfare. From the patterns of multinational production across countries, three facts stand out: a small fraction of country-pairs engages in multinational activities with each other; geography remains a significant impediment to the expansion of such activities; and country size matters. I introduce multinational production in a competitive, multi-country, general equilibrium model with bilateral fixed costs that qualitatively reproduces these facts. The model delivers an equation for sales of foreign affiliates that predicts zero as well as positive volumes between country-pairs, and where positive flows are related to technology, size, and barriers. Using data on bilateral sales of affiliates, for OECD and non-OECD countries, I estimate barriers to multinational activities using an indirect inference procedure. Estimates suggest that distance remains a significant impediment, with countries twice as distant facing a 50% higher cost; policy variables, such as preferential treaties and taxes, have small effects. Finally, welfare calculations show that there are large, unrealized gains of removing bilateral barriers to multinational production

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://home.uchicago.edu/~nramondo
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Christian Zimmermann)


File Function: main text
Download Restriction: no

File URL: http://repec.org/sed2006/up.12703.1139950861.pdf
Download Restriction: no

Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 472.

as
in new window

Length:
Date of creation: 03 Dec 2006
Date of revision:
Handle: RePEc:red:sed006:472
Contact details of provider: Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Fax: 1-314-444-8731
Web page: http://www.EconomicDynamics.org/society.htmEmail:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Natalia Ramondo, 2009. "Foreign Plants and Industry Productivity: Evidence from Chile," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 789-809, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:red:sed006:472. 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: (Christian Zimmermann)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.