EconPapers    
Economics at your fingertips  
 

The Organization of Knowledge in Multinational Firms

Anna Gumpert

Journal of the European Economic Association, 2018, vol. 16, issue 6, 1929-1976

Abstract: This paper studies the organization of knowledge in multinational firms. In the theory, knowledge is a costly input for firms that they can acquire at their headquarters or their production plants. Communication costs impede the access of the plants to headquarter knowledge. The model shows that multinational firms systematically acquire more knowledge at both their foreign and domestic plants than non-multinationals if their foreign plants face higher communication costs with headquarters than their domestic plants. This theoretical prediction helps understand why multinational firms pay higher wages to workers than non-multinational firms, and why their sales decrease across space. The empirical analyses show that higher communication costs indeed decrease multinational firms’ foreign sales. Consistent with model-specific comparative statics, the decrease is stronger in sectors with less predictable production processes. Data on corporate transferees allow shedding light on one tool of multinational firms’ organization of knowledge.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/jeea/jvx054 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Organization of Knowledge in Multinational Firms (2018)
Working Paper: The Organization of Knowledge in Multinational Firms (2017) Downloads
Working Paper: The Organization of Knowledge in Multinational Firms (2015) Downloads
Working Paper: The organization of knowledge in multinational firms (2015) Downloads
Working Paper: The organization of knowledge in multinational firms (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:16:y:2018:i:6:p:1929-1976.

Access Statistics for this article

More articles in Journal of the European Economic Association from European Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2021-09-12
Handle: RePEc:oup:jeurec:v:16:y:2018:i:6:p:1929-1976.