Interdependence in multinational production networks

Maggie Chen

Canadian Journal of Economics, 2011, vol. 44, issue 3, 930-956

Abstract: Most multinational firms today operate multilateral production networks. Most existing empirical analyses, however, have focused on firms' choice between producing at home and investing overseas. This paper uses detailed French multinational subsidiary data to examine the effect of existing production networks on multinationals' entry decisions. The paper finds strong horizontal and vertical interdependence across multinationals' foreign production locations, but little interdependence between home and foreign production when third-country effects are taken into account. This result constitutes a sharp contrast to the conventional emphasis and highlights the importance of investigating foreign direct investment in the context of multinational production networks.

JEL-codes: D21 F23 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Interdependence in Multinational Production Networks (2010)
Working Paper: Interdependence in Multinational Production Networks (2009)
Working Paper: Interdependence in Multinational Production Networks (2009)
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