TY  - JOUR
AU  - Markusen,James R.
AU  - Maskus,Keith E.
TI  - General-Equilibrium Approaches to the Multinational Firm: A Review of Theory and Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8334
PY  - 2001
Y2  - June 2001
UR  - http://www.nber.org/papers/w8334
L1  - http://www.nber.org/papers/w8334.pdf
N1  - Author contact info:
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  - Beginning in the early 1980s, theoretical analyses have incorporated the multinational firm into the microeconomic, general-equilibrium theory of international trade.  Recent advances indicate how vertical and horizontal multinationals arise endogenously as determined by country characteristics, including relative size and relative endowment differences, and trade and investment costs.  Results also characterize the relationship between foreign affiliate production and international trade in goods and services.  In this paper, we survey some of this recent work, and note the testable predictions generated in the theory.  In the second part of the paper, we examine empirical results that relate foreign affiliate production to country characteristics and trade/investment cost factors.  We also review findings from analyses of the pattern of substitutability or complementarity between trade and foreign production.
ER  -