TY  - JOUR
AU  - Bagwell,Kyle
AU  - Staiger,Robert W.
TI  - Private Cost Information and the Multinational Enterprise
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2657
PY  - 1988
Y2  - July 1988
UR  - http://www.nber.org/papers/w2657
L1  - http://www.nber.org/papers/w2657.pdf
N1  - Author contact info:
Kyle Bagwell
Department of Economics
Stanford University
Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
Tel: (650) 723-3251
E-Mail: kbagwell@stanford.edu

Robert W. Staiger
Department of Economics
Stanford University
Landau Economics Building
579 Serra Mall
Stanford, CA  94305-6072
Tel: 650/723-0533
Fax: 650/725-5702
E-Mail: rstaiger@stanford.edu
AB  - This paper explores the informational role of plant location decisions for the multinational enterprise. When information about costs is incomplete, the location of a plant will be chosen not only for its impact on actual production costs, but also for Its impact on the perception of costs as held by foreign rivals. We show that the latter consideration, which can arise only in the presence of asymmetric information about costs, may lead to a decision to multinationalize even though actual production costs are higher as a result. As such, the informational role of plant location decisions is a potentially important element in understanding the behavior of the multinational firm.
ER  -