Publication

This paper uses data for over 60 countries and a model to predict the relationship between a multinational enterprise (MNE) and its host country suppliers. More specifically, it explores the financial implications of integrating these suppliers into the MNE structure vs. outsourcing them. The authors predict that integrated firms have better access to finance and cover a larger share of their costs using internal funds. Furthermore, they are less affected by changes in the financial situation of the host country.