 A theory of foreign direct investment, technology transfer, trade and capital movementsChapter 4 in Alternatives to the Multinational Enterprise, 1979, pp 63-81 from Palgrave Macmillan Abstract: Abstract This chapter considers the role of MNEs in trade and capital movements. The analysis is based on very strong assumptions which are equivalent to ignoring the potential social costs of MNEs. The emphasis is much more on the fact that in an imperfect world the creation of an MNE may under certain conditions improve efficiency. The analysis demonstrates, firstly, that under certain conditions an MNE’s location of production is similar to that generated by international competition between’ purely national firms and, secondly, that foreign direct investment flows owe little or nothing to international differences in capital endowments, and almost everything to the economics of horizontal and vertical integration in specific industries. The analysis constitutes an extension and application of the Heckscher-Ohlin (HO) model of trade. Non-specialist readers, or those mainly interested in applications, may prefer to omit this chapter on a first reading. Keywords: Foreign Direct Investment; Technical Progress; Factor Price; Multinational Enterprise; Capital Movement (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-04645-4_4 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-04645-4_4 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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