Multinational Firms in the World Economy

Abstract

Addresses the concerns surrounding multinational enterprises (MNEs) and clarifies the debate about MNEs, providing an assessment of what they are, why and where they arise, and their economic impact on home and host countries. Presents an overview of theory and empirical findings relating to MNEs. Examines theory on the determinants and impact of MNEs, looking at horizontal and vertical FDI, respectively. Provides a theoretical treatment of the choice of the mode of supplying a foreign market, whether internalized through a foreign subsidiary or outsourced through a market transacting with another firm. Reviews the available theoretical evidence on the determinants of FDI. Surveys the empirical evidence on the effects of FDI on host countries and provides a case study of Ireland, a country which has been very successful in attracting FDI and in using FDI to boost its economic development. Reviews the empirical evidence on the effects of FDI in home countries. Considers the implications for policy. Barba Navaretti is Professor of International Economics at the University of Milan and Scientific Director of the Centro Studi Luca d'Agliano. Venables is Professor of International Economics at the London School of Economics and directs a research program at the Centre for Economic Performance. Glossary; index.