Title: Multinational Firms and the Theory of International Trade
Abstract: This volume is to a large extent a summary of Markusen’s contribution to the study of the multinational firm over the past 20 years, tracing the introduction of game theory and modern trade theory to the analysis of FDI and the multinational enterprise. Work of this type by Markusen, Venables and others has not only added significantly to our understanding of the multinational enterprise, but has also informed much of the applied work and policy analysis concerned with the location of economic activity. The volume provides interesting insight into how models of the multinational enterprise and of strategic trade policy developed simultaneously, largely independent of firm‐based transaction cost models of FDI in industrial economics. The latter approach is discussed later in the book, and therefore this is an ideal volume for graduate students in both industrial and international economics studying the analysis of the multinational enterprise. The early chapters are devoted to a discussion of the models of firm location based on new trade theory. The partial and general equilibrium models are clearly presented, while the author is very honest in outlining the limitations of the analysis. A counterfactual analysis is introduced towards the end of the initial chapters. This seems to be something of an afterthought, which is rather disappointing, as a fuller discussion of the counterfactual to FDI would have been of interest from a policy perspective as well as making a significant contribution to much of the current applied work in this area.
Publication Year: 2004
Publication Date: 2004-02-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 81
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