Multinational Entry and Exit, Technology Transfer, and International Business Cycles

Gautham Udupa

Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL)

Abstract: I develop a general equilibrium model of trade and horizontal multinational production (MP) with firm heterogeneity, market access frictions including export and MP sunk costs, multinational parent-to-affiliate technology transfer, and capital. I find that pro-cyclical MP exit (i.e., MP extensive margin) plays an important role in increasing macroeconomic volatility and reducing international correlations. When calibrated to match US data, I approximate that at least 15% of the change between a no-MP model and the MP model can be attributed to MP extensive margin. Overall, the paper highlights the importance of firm extensive margin, in particular that of MP, in aggregate business cycle dynamics.

Keywords: international business cycles; multinational production; technology transfer (search for similar items in EconPapers)
JEL-codes: F21 F23 F44 (search for similar items in EconPapers)
Pages: 33
Date: 2024
References: Add references at CitEc
Citations:

Published in Journal of Economic Dynamics and Control

Downloads: (external link)
https://www.cafral.org.in/sfControl/content/Speech ... BC_Paper_Gautham.pdf

Related works:
Journal Article: Multinational entry and exit, technology transfer, and international business cycles (2024)
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:ris:cafral:022287

Access Statistics for this paper

More papers in Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL) Contact information at EDIRC.
Bibliographic data for series maintained by Anup B. Sonawane ().