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Research Institute of Industrial Economics (IFN) Working Paper Series

No 512:
Multinational Firms, Technology and Location

Pehr-Johan Norbäck ()

Abstract: This paper analyzes a three-stage optimization problem in which a firm chooses (i) its technology, by deciding on a level of R&D, (ii) whether this technology is to be used in a domestic or in a foreign plant and (iii) the quantity produced and sold on the market. If technology transfer costs are low, "high-tech" or R&D-intensive firms tend to produce abroad. At higher technology transfer costs, high-tech firms tend to export. An empirical analysis using a data set of Swedish multinational firms, confirms the latter prediction.

Keywords: Multinational Firms; R&D; Location; Empirical Analyses; (follow links to similar papers)

JEL-Codes: F23; L13; O33; (follow links to similar papers)

35 pages, March 12, 1999, Revised November 2, 2000

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This paper is forthcoming as:
Norbäck, Pehr-Johan, 'Multinational Firms, Technology and Location', Journal of International Economics.



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