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What is Multinational Firms in Trade Theory about?

The document discusses the industrial-organization approach to international trade, integrating features like increasing returns to scale and product differentiation into trade models. It highlights the distinction between horizontal and vertical multinational firms and presents theoretical models that predict the production volume of foreign affiliates based on country characteristics. Empirical tests support the theory, showing that multinational activity is concentrated among countries with similar sizes

Author

k61.2214110210

Language

EN