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Title:Globalization of the World Economy: What Happened in 1985? PDF Logo
Authors:Kleinert, Jörn
Issue Date:2000
Series/Report no.:Kieler Arbeitspapiere 969
Abstract:This paper brings forward a three-country model to analyze the internationalization process in the age of globalization. It is shown that investment of one company increases not only the incentive to invest in another country for every national competitor but for third country?s companies as well. That results from the adjustment of the host country?s companies which react to their shrinking market share by reducing output and raising the price of their goods. Some host country?s companies exit the market. The results are used to explain the surge of foreign direct investment since the mid-1980s.
Subjects:general equilibrium
globalization
multinational enterprises
JEL:F12
F21
F23
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
Publikationen von Forscherinnen und Forschern des IfW

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