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Estimating The Knowledge-Capital Model of the Multinational Enterprise

In: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models

Author

Listed:
  • DAVID L. CARR
  • JAMES R. MARKUSEN
  • KEITH E. MASKUS
Abstract
The industrial-organization (IO) approach to international trade (“new trade theory”) has incorporated features of increasing returns to scale, imperfect competition, and product differentiation into traditional general-equilibrium trade models. These new models offer rich predictions about the direction and volume of trade between two countries as functions of industry characteristics (factor intensities, scale economies, product differentiation) interacting with country characteristics (relative size differences, relative endowment differences, and trade costs)…

Suggested Citation

  • David L. Carr & James R. Markusen & Keith E. Maskus, 2021. "Estimating The Knowledge-Capital Model of the Multinational Enterprise," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 5, pages 95-110, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811222962_0005
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    More about this item

    Keywords

    Multinational Firms; Horizontal Multinationals; Vertical Multinationals; Internalization; Vertical Integration; Outsourcing; Foreign Affiliates; Per-Capita Income; Non-homothetic Preferences; Income Elasticity of Demand; Missing Trade Puzzle; Skill Premium Puzzle; Pro-competitive Gains From Trade; Complements; Externalities;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F00 - International Economics - - General - - - General
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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