Cover -- Half-title -- Series-title -- Title -- Copyright -- Contents -- Preface -- 1 The Multinational Enterprise as an Economic Organization -- 1.1 Horizontal Multiplant Enterprises and the MNE -- Proprietary Assets -- Some Extensions -- Empirical Evidence: Prevalence of Horizontal Foreign Investment -- Multinationals in Service Industries -- 1.2 Vertically Integrated MNEs -- Models of Vertical Integration -- Empirical Evidence -- Vertical Integration: Other Manifestations -- 1.3 Portfolio Diversification and the Diversified MNE -- Gains from Diversification versus Losses from Uncertainty -- Empirical Evidence -- Geographic and Product Diversification -- 1.4 Summary -- 2 The MNE and Models of International Economic Activity -- 2.1 Foreign Direct Investment and International Capital Flows -- 2.2. Exporting or Foreign Direct Investment? -- Theoretical Models of the Firm's Decision -- Exports and Foreign Investment: Joint Determinants -- Inter-Affiliate Trade -- Differences in Production Costs: Comparative Statics -- Evidence on Tariffs and Foreign Investment -- Preferential Trading Arrangements -- 2.3 Foreign Investment and Resource Allocation in the World Economy -- Basic General-Equilibrium Tools -- Foreign Investment and Specific Factors of Production -- Multinationals' Activities in General Equilibrium: Horizontal MNEs -- Multinationals' Activities in General Equilibrium: Vertical MNEs -- 2.4 Distribution of Foreign Investment Among Countries -- Theoretical Framework and Two-Way Foreign Direct Investment -- Source Countries' Attributes -- Affinities Between Source and Host Countries -- Host-Country Attributes -- Interregional Choices of Location -- 2.5 Summary -- 3 Organization and Growth of the MNE -- 3.1 Expansion of the Firm -- Adjustment Costs in Expansion of the MNE -- Firm-Specific Determinants of Foreign Investment.

Foreign Investment Decisions -- Turnover Processes -- 3.2 Organizational Structure -- Organizational Forms and Foreign Subsidiaries -- Economizing on Internal Coordination -- Organization and Information Links -- 3.3. Effects of Organization: New Venture or Acquisition? -- Risk, Size, and Experience -- Diversity and Other Influences on Acquisition of Subsidiaries -- Statistical Tests -- Volumes of Mergers and Green-Field Investments -- 3.4. Joint Ventures or Other Agreements Between Firms? -- Early Empirical Findings -- Theoretical Framework -- Wholly Owned Subsidiaries and Joint Ventures: Evidence -- Ownership Shares in Joint Ventures -- Performance of Joint Ventures -- Other Inter-Firm Agreements -- 3.5 Summary -- 4 Patterns of Market Competition -- 4.1 Foreign Investment and Oligopoly -- Entry Barriers and Bases for Foreign Investment -- Effects of Concentration on Foreign Investment -- Effects of Foreign Investment on Concentration -- 4.2 Market Behavior with MNEs Present -- Mutual Dependence Among MNEs -- MNEs and Other Market Rivals -- Profitability and Market Performance -- 4.3 Competition Policy and National Welfare -- MNEs and the Theory of Competition Policy -- Competition Policy in Practice -- 4.4 Vertically Integrated MNEs and Competition for Resource Rents -- Models of Natural-Resource Extraction with Sunk Costs -- Rents and the Extractive MNE -- The Division of Resource Rents -- 4.5 Summary -- 5 Income Distribution and Labor Relations -- 5.1 Income Distribution in General Equilibrium -- Theoretical Models -- Empirical Evidence -- 5.2. Employment and Wages: Short Run and Long Run -- Investment Substitution -- Export Substitution -- Empirical Evidence -- MNEs and the Fate of Low-Skilled Labor -- 5.3. Labor-Management Relations and Collective Bargaining -- Organization of Labor Relations within the MNE -- Wage Bargain: Theory.

Wage Bargaining in Practice -- 5.4 Summary -- 6 Investment Behavior and Financial Flows -- 6.1 Capital Formation and Foreign Direct Investment Flows -- Determinants of Foreign Investment and Capital Formation Abroad -- Finance and Capital Costs -- MNEs' Financing Practices in Market Context -- 6.2. Long-Term Financing Decisions and Financial-Asset Markets -- Theory of International Capital Markets -- MNEs' Financial Decisions -- Empirical Evidence: MNEs and Financial Diversification -- Empirical Evidence: Exchange-Rate Risks -- 6.3. Foreign-Exchange Rates and Short-Term Transactions -- Responses to Expected Exchange-Rate Changes -- 6.4 Summary -- 7 Technology and Productivity -- 7.1 The MNE as Producer of Technical Knowledge -- Foreign Investment and R&D Outlays -- Host-Country R&D Spending by MNEs -- 7.2 Licensing or Foreign Direct Investment? -- Arm's-Length Markets for Technology -- Factors Governing Choice -- MNEs, Technology Transfer, and the Product Cycle -- 7.3. General-Equilibrium and Welfare Aspects -- Focus on Source (Industrial) Countries -- Focus on Host (Developing) Countries -- 7.4 Knowledge Stocks and Spillovers -- Competition and Technology Rents -- Spillovers -- What Spills? What Is Contained? -- 7.5 Summary -- 8 Taxation, MNEs' Behavior, and Economic Welfare -- 8.1 Corporation Income Taxes, Market Distortions, and World Welfare -- Multiple Taxing Authorities -- Deferral, Transfer-Pricing Regulation, and Other Complications -- 8.2 Tax Conventions and National Welfare -- Taxing for Monopoly Gain -- Strategic Behavior and Tax Competition -- 8.3. National Tax Policies: Empirical Patterns -- Corporation Income Taxes and MNEs' Location Decisions -- National Policies and National Interests -- 8.4. Effects of Taxation on MNEs' Behavior -- Tax Effects on Transactions -- Transfer Pricing -- Organizational Strategies -- 8.5 Summary.

9 Multinationals in Developing Countries and Economies in Transition -- 9.1. Determinants of MNEs' Activities -- Foreign Subsidiaries Serving Domestic Markets -- Export-Processing Activities -- Government Incentives and Requirements -- Local Ownership Requirements -- 9.2 Effects on Economic Development -- Industrial Structure and Performance -- Skills, Wages, and Employment -- Choice of Technology -- Linkages -- Capital Inflows, Saving, and Balance of Payments -- Rate of Growth -- Tariff Protection, Import-Competing Foreign Investment, and Welfare -- 9.3. Third-World Multinationals -- Motives for Foreign Investment -- Destinations and Activities in Host Countries -- 9.4 Economies in Transition -- Acquisition and Performance of Transition Firms -- Aggregate Performance in Transition Economies -- 9.5 Summary -- 10 Public Policy -- 10.1 National and International Welfare -- Taxation -- Natural-Resource Rents -- Competition Policy -- Technology Creation and Transfer -- 10.2. National Policies: A Behavioral Approach -- Host Countries -- Empirical Evidence -- Source Countries -- 10.3 International Regulation -- Global and National Interests -- Treaties Governing International Investment -- 10.4 Summary -- Bibliography -- Name Index -- Subject Index.