Citation

Discussion Paper Details

Please find the details for DP3152 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Multinational Investment, Industry Risk and Policy Competition

Author(s): Jan I. Haaland and Ian Wooton

Publication Date: January 2002

Keyword(s): entry, exit, investment subsidies, multinational firms and uncertainty

Programme Area(s): International Trade and Regional Economics

Abstract: In an uncertain business climate, multinational enterprises must take account of future exit costs in deciding where to locate a branch plant. We study how differences in national labour-market conditions between countries influence this decision. Other things equal, the most attractive location has a flexible labour market (low closure costs) together with a low opportunity cost of employment (high unemployment). In a game between two countries, a nation with an inflexible labour market and high unemployment will succeed in attracting low-risk firms, while that with more flexible labour markets and low unemployment will win the game for higher risk firms.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3152

Bibliographic Reference

Haaland, J and Wooton, I. 2002. 'Multinational Investment, Industry Risk and Policy Competition'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3152