Integration strategies of emerging multinational corporations: Theoretical approach
International Journal of Economic Theory
Published online on May 05, 2016
Abstract
The traditional approach to multinational corporations typically assumes that advanced economies are sources of foreign direct investment, while emerging economies are merely passive recipients of the foreign capital. This paper presents a new model of multinational corporations originating in emerging countries. The new approach assumes that headquarters are located in a less developed country and production can be internationally dispersed. The paper attempts to define an optimal strategy of foreign production with respect to different levels of input prices, productivity of firms and market sizes.