Power in the multinational corporation in industry equilibrium - Archive ouverte HAL Access content directly
Journal Articles Economic Theory Year : 2009

Power in the multinational corporation in industry equilibrium

(1) , (2, 3)
1
2
3

Abstract

Recent theories of the multinational corporation introduce the property rights model of the firm and examine whether to integrate or outsource firm activities locally or to a foreign country. This paper focuses instead on the internal organization of the multinational corporation by examining the power allocation between headquarters and subsidiaries. We provide a framework to analyse the interaction between the decision to serve the local market by exporting or FDI, market access and the optimal mode of organization of the multinational corporation. We find that subsidiary managers are given decision power to run the firm at intermediate levels of host country competition. We then provide comparative statics on the optimal organization of the multinational corporation for changes in fixed FDI entry costs, trade costs, as well as changes in information technology.

Dates and versions

halshs-00754389 , version 1 (20-11-2012)

Identifiers

Cite

Dalia Marin, Thierry Verdier. Power in the multinational corporation in industry equilibrium. Economic Theory, 2009, 38 (3), pp.437-464. ⟨10.1007/s00199-007-0327-3⟩. ⟨halshs-00754389⟩
133 View
0 Download

Altmetric

Share

Gmail Facebook Twitter LinkedIn More