Multinational firms and the new trade theory

James R. Markusen; Anthony J. Venables

doi:10.1142/9789811222962_0003

Multinational firms and the new trade theory

Research output: Chapter in Book/Report/Conference proceeding › Chapter (Book) › Other › peer-review

Abstract

A model is constructed in which multinational firms arise endogenously. Multinationals are more important in total activity when countries are similar in incomes (size) and in relative factor endowments, and when total world income is high. These predictions are consistent with empirical evidence, and our results help point to more formal tests. The standard oligopoly model of international trade is a special case of our model when multinationals are suppressed, and this allows us to provide an explicit comparison to the national-firm model with respect to the location of production, welfare, and the volume of trade.

Original language	English
Title of host publication	Broadening Trade Theory
Subtitle of host publication	Incorporating Market Realities into Traditional Models
Editors	James R. Markusen
Place of Publication	Singapore Singapore
Publisher	World Scientific Publishing
Chapter	3
Pages	47-67
Number of pages	21
Edition	1st
ISBN (Electronic)	9789811222962
ISBN (Print)	9789811222955, 9789811222979
DOIs	https://doi.org/10.1142/9789811222962_0003
Publication status	Published - 2021
Externally published	Yes

Publication series

Name	World Scientific Studies in International Economics
Volume	78
ISSN (Print)	1793-3641

Keywords

Endogeneous location
Multinationals
New trade theory

Access to Document

10.1142/9789811222962_0003

Cite this

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Multinational firms and the new trade theory. / Markusen, James R.; Venables, Anthony J.

Broadening Trade Theory: Incorporating Market Realities into Traditional Models. ed. / James R. Markusen. 1st. ed. Singapore Singapore : World Scientific Publishing, 2021. p. 47-67 (World Scientific Studies in International Economics; Vol. 78).

Research output: Chapter in Book/Report/Conference proceeding › Chapter (Book) › Other › peer-review

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Multinational firms and the new trade theory

Abstract

Publication series

Keywords

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Research output

Multinational firms and the new trade theory

Cite this