International Market Structuring with a Multinational Enterprise

Ahn, Sukwhan; Kang, In Soo; Shin, Hyukseung

doi:1997.12.2.242

Journal of Economic Integration 1997 June;12(2) :242-258.
DOI: https://doi.org/10.11130/jei.1997.12.2.242

International Market Structuring with a Multinational Enterprise

Sukwhan Ahn, In Soo Kang, Hyukseung Shin

Sookmyung Women's University

ABSTRACT

This paper examines the economic rationales and conditions for the emergence of multinational enterprises (MNEs). Promoting production efficiency is not sufficient to justify the emergence of an MNE. With taxes in the model, tax authorities heavily tax an MNE's economic activities, in which case an MNE becomes harder to justify on welfare grounds. This arises from the public good nature of MNEs and suggests a tax policy coordination to foster welfare improvement through the emergence of MNEs. (JEL: F23, D43, H21)

REFERENCE

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3.	Behrman, Jack N. [1972], The Role of International Companies in Latin America: Autos and Petrochemicals, Lexington, MA: Lexington Books.