Multinational Corporations and International Trade Theory

Author: (USA) James R. Markusen
Publisher:
Publish Date: 2005-02-01
Features: Although multinational corporations hold a significant position in international economics, their theoretical and empirical research is often detached from that of international trade theory and empirical studies. In this book, James R. Markusen perfectly integrates the two. Over the past two decades of research, he has focused on the relationships between economies of scale, trade costs, factor endowments, and imperfect competition. He analyzes the choice between establishing factories abroad and acquiring factories, and discusses the financing methods for each scenario. Starting from simple partial equilibrium models, after systematic research, he derives a complete general equilibrium model that includes both horizontal and vertical direct investment. He also provides empirical tests of the assumptions underlying the theoretical models. The entire text maintains consistent notation, offers thorough and detailed analysis of model differences, and is supported by numerous figures and tables.