TY - JOUR
T1 - Optimal integration strategies for the multinational firm
AU - Grossman, Gene M.
AU - Helpman, Elhanan
AU - Szeidl, Adam
N1 - Funding Information:
We acknowledge with thanks the support of the National Science Foundation (SES 9904480 and SES 0211748) and the US-Israel Binational Science Foundation (2002132). We thank Jonathan Eaton and two referees for helpful comments.
PY - 2006/9
Y1 - 2006/9
N2 - We examine integration strategies of multinational firms that face a rich array of choices of international organization. Each firm must provide headquarter services from its home country, but can produce its intermediate inputs and conduct assembly operations in one or more of three locations. We study the equilibrium choices of firms that differ in productivity levels, focusing on the role that industry characteristics such as the fixed costs of foreign subsidiaries, the cost of transporting intermediate and final goods, and the regional composition of the consumer market play in determining the optimal integration strategies.
AB - We examine integration strategies of multinational firms that face a rich array of choices of international organization. Each firm must provide headquarter services from its home country, but can produce its intermediate inputs and conduct assembly operations in one or more of three locations. We study the equilibrium choices of firms that differ in productivity levels, focusing on the role that industry characteristics such as the fixed costs of foreign subsidiaries, the cost of transporting intermediate and final goods, and the regional composition of the consumer market play in determining the optimal integration strategies.
KW - Direct foreign investment
KW - Intra-firm trade
KW - Multinational corporations
KW - Vertical integration
UR - http://www.scopus.com/inward/record.url?scp=33747800300&partnerID=8YFLogxK
U2 - 10.1016/j.jinteco.2005.07.011
DO - 10.1016/j.jinteco.2005.07.011
M3 - ???researchoutput.researchoutputtypes.contributiontojournal.article???
AN - SCOPUS:33747800300
SN - 0022-1996
VL - 70
SP - 216
EP - 238
JO - Journal of International Economics
JF - Journal of International Economics
IS - 1
ER -