DP9500 Do Multinationals Transplant their Business Model?
|Author(s):||Dalia Marin, Linda Rousová, Thierry Verdier|
|Publication Date:||June 2013|
|Keyword(s):||organisational economics of multinational firms, organisational transfer between countries, the theory of the firm, trade and organisations|
|JEL(s):||D23, F12, F23, F61|
|Programme Areas:||Industrial Organization, International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=9500|
What determines whether or not multinational firms transplant their mode of organisation to other countries? We embed the theory of knowledge hierarchies in an industry equilibrium model of monopolistic competition to examine how the economic environment may affect the decision to transplant the business organization. We test the theory with original data of 660 multinational firms and 2200 of their affiliates. Three factors stand out: a competitive host market, the corporate culture of the multinational firm, and the transfer of an innovative technology. These factors increase the respective probabilities of organisational transfer by 9, 18, and 27 percentage points.