Multinational Firms and the Factor Intensity of Trade
Robert E. Lipsey, Merle Yahr Weiss
NBER Working Paper No. 8
In studying the impact of direct investment on the amount, direction, and composition of international trade we have found that the multinational firm fits uncomfortably into the usual theory of trade and capital movements. We attempt here to introduce the fact of the existence of multinational firms into the explanation of trade flows and particularly into the long-running debate over the relations among factor abundance, factor prices and trade.