Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46258
Authors: 
Seidel, Tobias
Year of Publication: 
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

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