Download now Free registration required
The globalized world economy is experiencing a rising importance of MultiNational Enterprises (MNEs). Referring to OECD data, worldwide Foreign Direct Investment (FDI) has sextupled since the early 1990s. These days, more than one third of international trade is intra-company trade of MNEs with affiliates in different locations worldwide. Hence, for the modern firm it is optimal to fragment the production process across national borders irrespective of tax considerations (e.g. Krugman, 1995). At this level of decision, when the firm has generally decided on establishing a production plant abroad versus the alternative of exporting, the firm can then choose between different locations, also taking national corporation taxes into account.
- Format: PDF
- Size: 722.6 KB