The role of multinational production in a risky environment

• 成果类型: Article
• 署名作者: Ramondo, Natalia; Rappoport, Veronica
• 署名单位: Columbia University; University of Texas System; University of Texas Austin
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2010.02.003
• 发表日期: 2010
• 页码: 240-252
• 关键词: foreign direct investment; multinational firms; International risk sharing

摘要

This paper explores the aggregate consequences of Foreign Direct Investment (FDI) on the opportunities for risk diversification available to consumers. The crucial difference between FDI and other international financial flows is that the former involves technology flows across countries. We present a model where firm-embedded productivity can be transferred costly across countries through the activity of multinational firms. We find that risk patterns affect multinationals' location decisions and, in turn, these decisions change the scope for international risk diversification even in a world with complete financial markets. (C) 2010 Elsevier B.V. All rights reserved.