Handbook of International Economics

Chapter 2

Multinational Firms and the Structure of International Trade*

Pol Antràs^{a, b, c} and Stephen R. Yeaple^{b, d},    ^aHarvard University, Cambridge, MA, USA, ^bNational Bureau of Economic Research, Cambridge, MA, USA, ^cCentre for Economic Policy Research, London, UK, ^dPennsylvania State University, University Park, PA, USA

Abstract

This chapter reviews the state of the international trade literature on multinational firms. This literature addresses three main questions. First, why do some firms operate in more than one country while others do not? Second, what determines in which countries production facilities are located? Finally, why do firms own foreign facilities rather than simply contract with local producers or distributors? We organize ...