The Structure of Multinational Firms' International Activities

Ronald Davies and James Markusen

No 202005, Working Papers from School of Economics, University College Dublin

Abstract: The structure of a multinational firm, that is how its affiliates relate to one another, is critical for understanding where multinationals locate, how policy affects them, and their resilience to localized shocks. Here, we review the two main structures – market-seeking horizontal and cost-difference exploiting vertical investment – prevalent in the literature. In addition, we use data (primarily from the US) to examine which of these structures seems to dominate the data. This includes a novel use of measures of global value chain positioning of a country's industries. In each case, the data suggests a dominant role for horizontal investment. We conclude with a discussion of the challenge that intangibles play in multinational data and point towards potentially fertile areas for future research.

Keywords: Foreign direct investment; Multinational corporations; Horizontal FDI; Vertical FDI; Global value chains (search for similar items in EconPapers)
JEL-codes: F14 F23 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2020-02
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10197/11431 First version, 2020 (application/pdf)

Related works:
Working Paper: The Structure of Multinational Firms' International Activities (2020)
Working Paper: The Structure of Multinational Firms' International Activities (2020)
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:ucn:wpaper:202005

Access Statistics for this paper

More papers in Working Papers from School of Economics, University College Dublin Contact information at EDIRC.
Bibliographic data for series maintained by Nicolas Clifton ().