Proximity-Concentration versus Factor Proportion Explanation: The Case of Swedish Multinationals in the EU

Thomas Mathä

No 416, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: Both proximity-concentration trade-off and factor proportions explanations have been forwarded to explain the existence of multinational enterprises. This paper analyses to what extent these different explanations are supported empirically, in making a first attempt to distinguish explicitly between horizontally and vertically integrated multinationals. The affiliate production share of horizontally integrated multinationals is mainly explained by low plant-level economies of scale, large host country size and similarities in relative factor endowments. Differences for vertical multinationals appear with regard to firm- and plant-level economies of scale, country size, trade costs and relative factor endowments at the national and sectoral level.

Keywords: Trade Costs; Country Size; Factor Endowments; Horizontal & Vertical Multinationals (search for similar items in EconPapers)
JEL-codes: F12 F21 F23 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2000-11-15, Revised 2000-12-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0416

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