Firm in Home

1
Figure 2.1 Home firm decision tree
Firm in Home serve foreign markets / source from
abroad?
no
yes, source from abroad
yes, serve foreign market
Stay domestic
Export or local production?
Import or local production?
export
import
local production
local production
Export
Import
Multinational activity horizontal
Multinational activity vertical
triggers intra-firm trade
Two types of trade intra-firm and
inter-firm Consisting of trade in final goods,
services, and intermediate goods
Two types of multinational activity horizontal
and vertical Multinational firm owning and
controlling value adding activities in two or
more countries
2
Fig. 2.2 Horizontal and vertical multinational
activity
Country B
Country A
Multinational (producer)
Foreign subsidiary (producer)
FDI
Horizontal multinational (market seeking)
Finished products
Finished products
Market A
Market B
Finished products
Components
Vertical multinational (efficiency seeking)
Foreign subsidiary (assembler)
FDI
Multinational (producer, marketer)
Finished products
3
Figure 2.3 US export shares in 2010
Source US census Bureau, own calculations
4
Figure 2.4 A countrys balance of payments
Source van Marrewijk (2012, p. 411)
5
Figure 2.5 Current account balance of GDP,
1980-2012
Source based on data from World Development
Indicators online (1980-2010) and The Economist,
June 9, 2012, Trade, exchange rates, budget
balances, and interest rates (2012 estimate).
6
Figure 2.6 FDI flows, 2005-2011
Source based on data from UNCTAD, World
Investment Report 2012 developed developed
economies developing developing economies
transition transition economies.
7
Figure 2.7 Value added export (VAX) as a share of
GDP 1995 and 2008 ()
Source based on World input output Database
(WIOD), see wiod.org.
8
Figure 2.8 Value added distributon of an Apple
iPad, 2011
Source The figure is based on data provided by
Linden et al (2009, 2011). See also The Economist
January 21, 2012.
9
Figure 2.9 Global net capital flows average for
15 countries, 1870-2010
Source see Table 2.11 average includes
countries listed in Table 2.11 plus Denmark,
Finland, the Netherlands, Norway, Spain, and
Sweden.
10
Figure 2.10 Capital outflows selected countries
( of national savings
Source ORourke and Williamson (1999).
11
Figure 2.11 Evolution of British and American
share in foreign assets
Source see Table 2.14
12
Figure 2.12 Net private financial flows to
developing economies bn, 1992-2009
Source IMF, World Economic Outlook database D
Asia Developing Asia L Am Latin America
Caribbean CE Eur Central Eastern Europe
CIS Commonwealth of Independent States SSA
Sub-Saharan Africa.