Global patterns of FDI and trade are remarkably similar, yet mainstay theory has them as substitutes. We posit a model where multiproduct, final-goods firms simultaneously engage in intraindustry FDI and intraindustry trade. The logic behind this two-way FDI is analogous to that of two-way trade in the Brander–Krugman reciprocal-dumping model. Namely, multiproduct firms use trade costs to reduc...

Hedging is no longer an option for multinational corporations, especially during global financial crisis. This was clearly manifested in companies’ comprehensive income statement as in WalMart’s case that “During fiscal 2009, foreign currency exchange rate had a $2.3 billion unfavorable impact on the international segment’s net sales” and the company just lost $680 million in the second quarter...

Multinationals’ aggressive tax lobbying that involves free-riding behaviour and results in disproportional benefits to the disadvantage of other taxpayers, is problematic for several reasons. Such undermines legitimacy legislation has a negative impact on trust system. Based Immanuel Kant’s ethical theory, this article first suggests new normative basis moral duty requires multinationals their ...

A model is constructed in which multinational firms may arise endogenously. Multinationals exist equilibrium when transport and tariff costs are high, incomes firm-level scale economies important relative to plant-level economies. Less obvious, multinationals more total economic activity countries similar incomes, factor endowments, technologies. The thus be useful explaining several stylized f...