Publication
Apr 2002
This paper explores the driving forces behind the internationalization of production processes. It notes that whereas many empirical studies find that falling distance costs drive the internationalization of production, theoretical models of the endogenous emergence of multinational enterprises predict the opposite and highlight the incentives for foreign production, bypassing trade costs altogether. The paper argues that this dichotomy can be resolved if production processes are modeled more realistically by taking into account the use of intermediate goods.
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English (PDF, 46 pages, 551 KB) |
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Author | Jörn Kleinert |
Series | Kiel Institute Working Papers |
Issue | 1104 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2002 Kiel Institute for the World Economy |