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Author: | Konan, D. |
Title: | The vertical multinational enterprise and international trade |
Journal: | Review of International Economics
2000 : FEB, VOL. 8:1, p. 113-125 |
Index terms: | INTERNATIONAL ECONOMICS MULTINATIONAL COMPANIES INTERNATIONAL TRADE |
Language: | eng |
Abstract: | The 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. |
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