TY  - JOUR
AU  - Markusen, James R
AU  - Venables, Anthony J
TI  - The Theory of Endowment, Intra-Industry, and Multinational Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5529
PY  - 1996
Y2  - April 1996
DO  - 10.3386/w5529
UR  - http://www.nber.org/papers/w5529
L1  - http://www.nber.org/papers/w5529.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

Anthony Venables
Department of Economics
University of Oxford
Manor Road Building
Manor Road
Oxford OX1 3UQ, United Kingdom
and CEPR
E-Mail: tony.venables@economics.ox.ac.uk
AB  - We consider a trade model combining a 2x2x2 Heckscher-Ohlin structure, monopolistic competition, transport costs, and multinational corporations.  We demonstrate how the mix of national and multinational firms that operate in equilibrium depends on technology and on the division of the world endowment between countries. Multinationals are more likely to exist the more similar are countries in both relative and absolute endowments.  Where multinationals exist they reduce the volume of trade and raise world welfare (although not necessarily that of both countries).  They also reduce the agglomeration forces that arise when international factor mobility is allowed.
ER  -