Dynamics of Large Multinationals / Elhanan Helpman, Benjamin C. Niswonger.

Format:

Book

Author/Creator:

Helpman, Elhanan.

Contributor:

National Bureau of Economic Research.

Niswonger, Benjamin C.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29317.

NBER working paper series no. w29317

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

We develop a model of large multinational enterprises, each one producing a continuum of products. These outsized firms compete as oligopolists in a domestic and foreign market, facing competitive pressure from single-product firms that engage in monopolistic competition. The multinational enterprises invest in R&D in order to expand the span of their products and in foreign direct investment (FDI) in order to expand the range of products manufactured by their foreign affiliates. We study the dynamic evolution of these markets and characterize transition dynamics and steady states. In addition to the evolution of product spans, we characterize the evolution of prices, markups, market shares, and exports relative to subsidiary sales. Furthermore, we study comparative dynamics that result from changes in trade costs, R&D costs, the cost of FDI and productivity changes of the multinational firms.

Notes:

Print version record

October 2021.