Duncan’s Economic Blog

Transnational firms – any suggested reading?

Posted in Uncategorized by duncanseconomicblog on August 12, 2010

I’m getting quite interested in an issue and was wondering if any readers could suggest any books, articles (I have access to several academic databases) or online stuff that might be useful?

What I want is something on the macroeconomics of transnational firms – the kind of mesoeconomic stuff that Stuart Holland was writing about in the 1980s.

The issue that is bothering me is that most macroeconomics assumes that there is a “corporate sector” or “firms”, but tends to think of them (as convenient short hand) as being entirely domestic.

Or if they are asking that question – it is usually outside of the standard macroeconomic model

As an example – macroeconomists have various competing  ideas about what makes firms choose to invest (expectations, cost of capital, interest rates, credit availability, demand, etc), but rarely ask the question – what makes them invest in this country?

So, we might have a firm that has good expectations for profits in country A, easily available finance, etc, etc and it might decide to build a new factory in country B. A standard one country macroeconomic model risks missing this.  Equally, conditions in country B might be awful with depressed demand and high interest rates… but there might be circumstances when investment was still high as firms located production there in order to meet demand in country A.

This strikes me as problematic. Especially as transnational firms take on an ever increasing role in the economy.

Any suggestions?


One Response

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  1. James Doran said, on August 19, 2010 at 1:53 am

    Interesting place to start might be: http://unctc.unctad.org/aspx/libraryVolumesTitle.aspx

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