Organization of Multinational Activities and Ownership Structure

Mugele, Christian und Schnitzer, Monika (Februar 2006): Organization of Multinational Activities and Ownership Structure. Münchener Wirtschaftswissenschaftliche Beiträge (VWL) 2006-23

Abstract

We develop a model in which multinational investors decide about the modes of organization, the locations of production, and the markets to be served. Foreign investments are driven by market-seeking and cost-reducing motives. We further assume that investors face costs of control that vary among sectors and increase in distance. The results show that (i) production intensive sectors are more likely to operate a foreign business independent of the investment motive, (ii) that distance may have a non-monotonous effect on the likelihood of horizontal investments, and (iii) that globalization, if understood as reducing distance, leads to more integration.

• Dokumententyp: Paper
• Keywords: Multinationals, Joint ventures, Technology spillovers, Distance, Horizontal and vertical investments, Ownership structure
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Munich Discussion Papers in Economics ; Volkswirtschaft > Munich Discussion Papers in Economics > Industrieökonomik ; Volkswirtschaft > Munich Discussion Papers in Economics > Internationaler Handel ; Volkswirtschaft > Lehrstühle > Seminar für Komparative Wirtschaftsforschung
• Themengebiete: 300 Sozialwissenschaften > 300 Sozialwissenschaft, Soziologie ; 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: F23, L24, L22, L23, D23
• Sprache: Englisch