Multinational Firms and the Structure of International Trade

Pol Antràs, Stephen Ross Yeaple

Research output: Chapter in Book/Report/Conference proceedingChapter

104 Scopus citations

Abstract

This chapter reviews the state of the international trade literature on multinational firms. This literature addresses three main questions. First, why do some firms operate in more than one country while others do not? Second, what determines in which countries production facilities are located? Finally, why do firms own foreign facilities rather than simply contract with local producers or distributors? We organize our exposition of the trade literature on multinational firms around the workhorse monopolistic competition model with constant-elasticity-of-substitution (CES) preferences. On the theoretical side, we review alternative ways to introduce multinational activity into this unifying framework, illustrating some key mechanisms emphasized in the literature. On the empirical side, we discuss the key studies and provide updated empirical results and further robustness tests using new sources of data.

Original languageEnglish (US)
Title of host publicationHandbook of International Economics
PublisherElsevier B.V.
Pages55-130
Number of pages76
DOIs
StatePublished - Jan 1 2014

Publication series

NameHandbook of International Economics
Volume4
ISSN (Print)1573-4404

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Political Science and International Relations

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