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GTAP Resources: Resource Display

GTAP Resource #3495

"On the differential behaviour of national and multinational firms: A within and across sectors approach"
by Latorre, Maria and Antonio Gomez-Plana

This paper looks for different patterns of behaviour of national firms and multinationals (MNEs) using a computable general equilibrium model. The model is calibrated for the case of the Czech Republic, which has been a very attractive foreign direct investment location in the last three decades. We replicate the arrival of MNEs to different sectors of this country in turn and analyse the responses of both types of firms in the short run. The higher labour intensity of national firms leads them to different patterns of production and labour demand, compared to MNEs operating within the same sector. The demand side of the model, i.e., exports and private consumption, drives the evolution of production and labour demand across sectors. Regarding prices, the differential pattern between both types of firms seems weaker. Indeed, prices within and across sectors reflect a complex interplay between factor costs and intermediate costs. Our analysis offers detailed evidence on how the impact of MNEs will differ depending on the sector to which they arrive. Finally, the aggregate results suggest that a completely different microeconomic panorama may underlie rather similar macroeconomic outcomes.

Resource Details (Export Citation) GTAP Keywords
Category: 2011 Conference Paper
Status: Published
By/In: Presented at the 14th Annual Conference on Global Economic Analysis, Venice, Italy
Date: 2011
Created: Latorre, M. (3/24/2011)
Updated: Latorre, M. (7/15/2013)
Visits: 1,710
- Foreign direct investment
- Trade in services
- Europe (Eastern)

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