Electronic Resource
Oxford, UK and Boston, USA
:
Blackwell Publishers Ltd.
Review of international economics
8 (2000), S. 0
ISSN:
1467-9396
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
This paper analyzes an endogenous vertical multinational enterprise by explicitly modeling a distortion in the intermediate goods sector. Firms invest abroad to lower the cost of multistage production. The implications for international trade and investment differ markedly from the conventional wisdom of multinationals. Particularly, intrafirm trade in intermediates implies vertical investment complements rather than substitutes for trade. The decision to become a multinational depends on the level on foreign factor prices, the nature of the competition with foreign suppliers, transport, tariffs, and subsidiary plant costs. Marginal change in tariff may result in unintended welfare jumps as firm configuration shifts.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/1467-9396.00209
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