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Title:On the Coexistence of National Companies and Multinational Enterprises PDF Logo
Authors:Kleinert, Jörn
Issue Date:2003
Series/Report no.:Kieler Arbeitspapiere 1181
Abstract:National and multinational companies coexist in many sectors of all developed countries. However, economic models fail to reproduce this fact because of the assumption of symmetry between companies. To show that the symmetry assumption is the reason for this failure, a two-country general equilibrium model is set up where multinational enterprises emerge endogenously in reaction to exogenously induced market integration. In a model version with symmetric companies, stable mixed equilibria with national and multinational companies do not exist, because all companies decide to internationalize production at the same conditions. In contrast, if companies are allowed to differ, there exist a wide range of economic conditions where national and multinational companies coexist.
Subjects:Globalization
Multinational Enterprises
Exports
Market Structure
JEL:L22
F23
F12
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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