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Title:Foreign sales strategies of multinational enterprises PDF Logo
Authors:Kleinert, Jörn
Toubal, Farid
Issue Date:2010
Series/Report no.:Tübinger Diskussionsbeitrag 327
Abstract:The business literature has long recognized the importance of multinationals' distribution networks. The empirical analysis of distribution-oriented FDI has, however, received little attention which is at least partly due to the lack of appropriate data. We outline a slightly modified version of Helpman, Melitz, and Yeaple (2004) that explicitly models the possibility for a multinational firm to export through its wholesale trade affiliate in order to analyze multinational firms' choice between foreign production and foreign distribution. The subsequent empirical analysis uses different discrete choice models. We use alternative specifications and report estimation results for several sub-samples of multinational firms. We also consider more complex foreign sales strategies and correct for the sample selection bias that arises because we only observe firms that have foreign affiliates. Our results show that the decision between distribution and production-oriented FDI is based on the trade-off between fixed and variable costs.
Subjects:Multinational firms
Wholesale sales
Discrete choice
JEL:F23
F12
C25
Persistent Identifier of the first edition:urn:nbn:de:bsz:21-opus-46849
Document Type:Working Paper
Appears in Collections:Tübinger Diskussionsbeiträge, Universität Tübingen

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