Third-world multinationals: theory and evidence

Thesis/Dissertation · Thu Jan 01 04:00:00 EST 1987

OSTI ID:5009737

Ferrantino, M J

This dissertation seeks to explain the emergence of multinational firms from less-developed countries in terms of their technological specialization and the international pattern of transaction costs. Firms from India constitute the primary case study. In a model of multinational duopoly, it is shown that firms that possess a labor-intensive technology relative to their competitor will seek to locate in low-wage countries. However, since high-income markets also possess a high wage-rental ratio it may be in the long-run advantage of all firms to adopt a capital-intensive technology. Firms from both India and Argentina seek out high-income countries for foreign investment; the observed pattern of investment in low-income countries is explained by patterns of language similarity, migration and transport cost rather than by an underlying preference for low-income sites. Among Indian firms, large, technology-progressive firms with export experience invest abroad. The substitution of some types of Indian technology for imported technology accelerates this process.

• Research Organization: Yale Univ., New Haven, CT (USA)
• OSTI ID: 5009737
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
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Development
Demonstration
& Commercialization
DEVELOPING COUNTRIES
FUNCTIONAL MODELS
INSTITUTIONAL FACTORS
INVESTMENT
LABOR
MARKET
MULTINATIONAL ENTERPRISES
SOCIO-ECONOMIC FACTORS
TECHNOLOGY UTILIZATION