17.4 Multinational Enterprises
The managers of companies that produce in many countries must decide how much to trade and what prices to use when trading internationally between their units. These decisions turn critically on differences in tax laws across countries.
Most of the world’s largest companies are multinational enterprises (MNEs): enterprises that control productive assets in more than one country.16 MNEs play a dominant role in world trade flows, accounting for approximately 90% of U.S. exports and imports (Antràs and Yeaple 2014).
Multinationals normally have a parent company and a number of foreign affiliates. According to the definitions ...
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