Chapter 15 Multinationals and Migration

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Chapter 15 Multinationals and Migration
a. Multinationals
Link to syllabus
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FDI Foreign Direct Investment (p. 347)

• Flow definition Flow of funding provided by
  investors (usually firms) to establish or acquire
  foreign companies or to expand or finance
  existing foreign companies that the investors
  own.
• Key is sufficient ownership to control or
  influence the management of the foreign company.
• Stock definition Total value of existing
  funding (equity and debt) of foreign companies
  that has been provided by investors that own
  these foreign companies.

Multinational Enterprise
A firm that owns and controls operations in more
than one country
Portfolio vs. Direct Investment
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Figure 15.1 p. 348. Major Stocks of FDI, 2004
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Why do MNEs Exist? (pp. 349-50)

• Inherent disadvantages of operating a foreign
  affiliate competing against local firms.
• Firm-specific advantages of the MNE, especially
  intangible assets.
• Internalization advantages in using these assets.
• Location factors based on resource costs and
  availability, customer demand, government
  policies, and other considerations.
• Oligopolistic rivalry that uses FDI in the firms
  strategies for competing.

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Table illustrating transfer prices (Pugel, p. 356)
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Outsourcing by Toyota
Source NYT Oct 21, 2003
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Exporting Jobs and Sales
Source NYT April 19, 2004
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Narula/Dunning Investment Development Path
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IDP
Source UNCTAD World Investment Report, 2006
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US Net International Position, 1988-2005
Source US DoC. http//bea.gov/bea/newsrelarchive/
2006/intinv05_fax.pdf
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Link to IIP data
Link to intinv05_t2.xls
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US IIP, SCB Nov. 2005
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Accumulated Foreign Direct Investment into the
US, 2001.
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US. Direct Investment Abroad 2001
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US FI/GDP, 1900-2000
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Inward FDI Stocks in the US, by State.
Thompson International Economics Example 8.13.
Page 294
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FDI inward stock, selected years (billions of
current US dollars)
Source World Investment Report
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FDI outward stock, by Region. Selected years
(billions of current US dollars)
Source seems to be WIR
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Inward and Outward FDI/GDP, 1980-2000
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Outward Foreign Investment, OECD Countries,
1913-1995
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Outward FI/GDP, Twentieth Century
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Outward FDI/GDP, Twentieth Century
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Japan Outward FI/GDP
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Example 8.6 FDI between US and Japan. Page 281
Thompson International Economics
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FI from Oil Exporters
US 2006 Outward FI 1,062b
Outward FDI 235b
Source NYT November 28, 2007
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Canada Inward Investment/Capital Stock
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Canada Foreign Ownership Ratios, by Sector
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Mexico Foreign Ownership of Capital, 1910-1990
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China NYT Nov. 24, 2002
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(No Transcript)
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Figure 7.1 EU FDI Inflows, 1984-98 page 148
Hansen European Integration
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Table 7.4 Intra-EU FDI Flows. Page 152
Hansen European Integration
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Figure 7.2 EU Cross-border MA in Manufacturing.
Page 149
Hansen European Integration
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Table 7.3 Share of firms main motives for MA
Page 191
Hansen European Integration
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Figure 7.3 Share of Intra-EU FDI, by Sectors. P.
154
Hansen European Integration
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Table 7.5 Share of Intra-EU FDI in MFG., by
Technology. Page 155
Hansen European Integration
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Table 7.6 Intra-EU FDI Flows of France. Page 156
Hansen European Integration
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Figures 7.4 and 7.5. FDI Net Outflows from
France inside the EU. Page 157
Hansen European Integration
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Figure 7.6 Trade and FDI between France and EU,
1998. P 159
Hansen European Integration
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US Inward Outward FDI Flows, 1982-2004