The Rise of Multinational Corporations and Policy Preferences

Hidetaka Yoshimatsu

Chapter 2 in Internationalization, Corporate Preferences and Commercial Policy in Japan, 2000, pp 10-32 from Palgrave Macmillan

Abstract: Abstract What effect does international economic interdependence have on firms’ trade policy preferences? Heightened interdependence has exposed firms to more competition with foreign rivals, and has often led domestically oriented firms to demand that the government introduce protectionist measures. At the same time, rising interdependence has produced firms whose global operations are deeply integrated into the world economy. Such internationally oriented firms, represented by multinational corporations (MNCs), have brought about quantitative and qualitative changes in international trade through foreign direct investment (FDI). FDI has promoted the industrialization of recipient countries through a transfer of capital and technology, creating additional trade. A large portion of this trade occurs in the manufacturing sector, and raises levels of intra-industry trade. FDI by MNCs has also promoted intra-firm trade.

Keywords: Foreign Direct Investment; Trade Policy; Policy Preference; Home Market; Japanese Firm (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-00121-3_2

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DOI: 10.1057/9780230001213_2

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