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Multinational Firms in International Trade
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Models of international trade are enriched by including multinational firms. Factors associated with multinational activity like trade cost, marginal cost, fixed cost, complementarities and scale effects are investigated in monopolistically competitive two- and three-country- models of general equilibria. Different frameworks and cost structures lead to several implications for the integration of firms, which can be linked to a business administration approach and analysis of the firm's strategic management. The high accuracy of numerical models of multinational firms in a general equilibrium approach explain a wide range of multinational firms' activities in modern international trade.
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