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Southern Multinationals
Author(s) -
Adams Laurel A.
Publication year - 1998
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00116
Subject(s) - obsolescence , economics , subsidiary , production (economics) , tariff , market power , business , revenue , casual , international trade , industrial organization , market economy , multinational corporation , monopoly , microeconomics , marketing , finance , materials science , composite material
Investments in the North by Southern firms are still unusual. While such investments may be motivated by tariff jumping and internalization, casual empiricism suggests that such reverse DFI may be motivated by improved technology access. This paper examines, within a theoretical framework, whether enhanced technology access provides sufficient motivation for the endogenous formation of southern multinationals. Southern firms are most likely to establish northern subsidiaries in industries with rapid technological obsolescence; when global sales are high relative to DFI costs; and when domestic production costs are high. Neither market power nor significant market shares are a prerequisite for southern multinationals.