Distance and the margins of multinational firms' activities

Konferenzbeitrag

We present a model of multinational firms that predicts that aggregated affiliates' sales fall in distance. The distance effect on foreign affiliate sales is driven by the extensive margin: distance affects the number of affiliates negatively while it has an ambiguous effect on the average affiliate sales. We derive gravity equations explaining aggregate and average foreign affiliate sales and their number from the model. We discuss the revealed endogeneity bias and propose a system estimation to cure it. To assess the relative importance of the extensive and the intensive margins of foreign affiliates activities we use a comprehensive German data set. We find the extensive margin driving the negative effect of distance on multinational firms' activities.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Trade, Gravity and Distance ; No. A4-V2

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multinational Firms; International Business ; Economic Integration ; Model Evaluation, Validation, and Selection
• Thema: Gravity equation ; multinational rms ; distance costs

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kleinert, Jörn ; Toubal, Farid
• Ereignis: Veröffentlichung
• (wer): Verein für Socialpolitik
• (wo): Frankfurt a. M.
• (wann): 2010

Weitere Informationen

• Handle: http://hdl.handle.net/10419/37165
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ