The Multinational Firm

Stephen Yeaple

Annual Review of Economics, 2013, vol. 5, issue 1, 193-217

Abstract: This article documents the recent advances in the international trade literature toward understanding the role of multinational firms in the conduct of international commerce. Over the past 10 years, we have developed a better understanding of the incentives firms face in their choice of production location, and we know more about the incentives that induce firms to vertically integrate. Furthermore, the theory literature has progressed from two-country models that cannot capture the richness of multinational firms’ activities to multicountry models that do. The empirics have advanced as well but at a slower pace. Progress has been slowed by the lack of comprehensive data and the difficulties of distinguishing between the various mechanisms proposed by theory.

Keywords: foreign direct investment; horizontal integration; vertical integration; internalization; offshoring (search for similar items in EconPapers)
JEL-codes: F12 F23 L22 L24 L25 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (31)

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