Summary of the Discussion
The discussion first considered how MNEs affected the international allocation of economic activities and how MNE analysis was related to trade and location theory. Explanations of why multinational productive activity occurred were compared. The need to distinguish between two questions was illustrated; first: where should different types of economic activities be located? second: should these activities, wherever located, be foreign or domestic owned? MNE firms were an alternative to the market in allocating resources, it was noted, and the discussion of the welfare implications of the emergence of MNEs emphasised that they could help as well as hinder the functioning of markets. Finally the question why certain countries had more multinationals than others was posed. This session was chaired by Erik Dahmén.
KeywordsDirect Investment Foreign Market Steel Industry Location Theory Exchange Rate Change
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