TY  - JOUR
AU  - Carr,David L.
AU  - Markusen,James R.
AU  - Maskus,Keith E.
TI  - Estimating the Knowledge-Capital Model of the Multinational Enterprise
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6773
PY  - 1998
Y2  - October 1998
UR  - http://www.nber.org/papers/w6773
L1  - http://www.nber.org/papers/w6773.pdf
N1  - Author contact info:
David L. Carr

James R. Markusen
Department of Economics
University of Colorado
Boulder, CO 80309-0256
Tel: 303/492-0748
Fax: 303/492-8960
E-Mail: james.markusen@colorado.edu
AB  - What we term the firm includes three principal assumptions.  First, services of knowledge-based and knowledge-generating activities, such as R&D, can be geographically separated from production and supplied to production facilities at low cost.  Second, these knowledge-intensive activities are skilled-labor intensive relative to production.  These characteristics give rise to vertical multinationals, which fragment production and locate activities according to factor prices and market size.  Third, knowledge-based services have a (partial) joint-input characteristic that they can be supplied to additional production facilities at low cost.  This characteristic gives rise to horizontal multinationals, which produce the same goods or services in multiple locations.  In this paper, we note how this model predicts relationships between affiliate sales and country characteristics.  We then subject these predictions to empirical tests.
ER  -