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Global production with export platforms

Publication ,  Journal Article
Tintelnot, F
Published in: Quarterly Journal of Economics
February 1, 2017

Most international commerce is carried out by multinational firms, which use their foreign affiliates both to serve the market of the host country and to export to othermarkets outside the host country. In this article, I examine the determinants of multinational firms' location and production decisions and the welfare implications of multinational production. The few existing quantitative general equilibrium models that incorporatemultinational firms achieve tractability by assuming away export platforms-that is, they do not allow foreign affiliates of multinationals to export-or by ignoring fixed costs associated with foreign investment. I develop a quantifiablemulticountry general equilibrium model, which tractably handles multinational firms that engage in export platform sales and that face fixed costs of foreign investment. I first estimate themodel usingGerman firm-level data to uncover the size and nature of costs of multinational enterprise and show that the fixed costs of foreign investment are large. Second, I calibrate themodel to data on trade and multinational production for twelve European and North American countries. Counterfactual analysis reveals that multinationals play an important role in transmitting technological improvements to foreign countries and that the pending Canada-EU trade and investment agreement could divert a sizable fraction of the production of EU multinationals from the U.S. to Canada.

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Published In

Quarterly Journal of Economics

DOI

EISSN

1531-4650

ISSN

0033-5533

Publication Date

February 1, 2017

Volume

132

Issue

1

Start / End Page

157 / 209

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics
 

Citation

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Tintelnot, F. (2017). Global production with export platforms. Quarterly Journal of Economics, 132(1), 157–209. https://doi.org/10.1093/qje/qjw037
Tintelnot, F. “Global production with export platforms.” Quarterly Journal of Economics 132, no. 1 (February 1, 2017): 157–209. https://doi.org/10.1093/qje/qjw037.
Tintelnot F. Global production with export platforms. Quarterly Journal of Economics. 2017 Feb 1;132(1):157–209.
Tintelnot, F. “Global production with export platforms.” Quarterly Journal of Economics, vol. 132, no. 1, Feb. 2017, pp. 157–209. Scopus, doi:10.1093/qje/qjw037.
Tintelnot F. Global production with export platforms. Quarterly Journal of Economics. 2017 Feb 1;132(1):157–209.
Journal cover image

Published In

Quarterly Journal of Economics

DOI

EISSN

1531-4650

ISSN

0033-5533

Publication Date

February 1, 2017

Volume

132

Issue

1

Start / End Page

157 / 209

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics