The Theory of Endowment, Intra-Industry and Multinational Trade

James Markusen and Anthony Venables

No 1341, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We consider a trade model combining a 2x2x2 Heckscher-Ohlin structure, monopolistic competition, transport costs and multinational corporations. We demonstrate how the mix of national and multinational firms that operate in equilibrium depends on technology and on the division of the world endowment between countries. Multinationals are more likely to exist the more similar are countries in both relative and absolute endowments. Where multinationals exist they reduce the volume of trade and raise world welfare (although not necessarily that of both countries). They also reduce the agglomeration forces that arise when international factor mobility is allowed.

Keywords: Intra-industry Trade; Multinationals (search for similar items in EconPapers)
JEL-codes: F1 F2 (search for similar items in EconPapers)
Date: 1996-02
References: Add references at CitEc
Citations: View citations in EconPapers (124)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1341 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Chapter: The theory of endowment, intra-industry and multi-national trade (2021)
Journal Article: The theory of endowment, intra-industry and multi-national trade (2000)
Working Paper: The Theory of Endowment, Intra-Industry, and Multinational Trade (1996)
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:cpr:ceprdp:1341

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1341
orders@cepr.org

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by (repec@cepr.org).