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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/46258
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| Title: | | Foreign market entry under incomplete contracts  |
| Authors: | | Seidel, Tobias |
| Issue Date: | | 2010 |
| Series/Report no.: | | CESifo working paper: Trade Policy 3248 |
| Abstract: | | I show in this paper that incomplete contracts affect a firm's decision about serving foreign customers through exports or local sales from an affiliated plant. When contracts between two agents within a firm are too costly to write, the share of multinational firms may be higher or lower compared to a world without contractual frictions. Incomplete contracts also provide a novel explanation for why horizontal multinational activity may increase when trade costs fall - a result that is at odds with the proximity-concentration trade-off. |
| Subjects: | | multinational firms exports incomplete contracts |
| JEL: | | F12 F15 F23 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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