1、Dale R. DeBoerUniversity of Colorado, Colorado Springs9 - 1An Introduction to International EconomicsChapter 9: International Resource Movements and Multinational CorporationsDominick SalvatoreJohn Wiley & Sons, Inc.9 - 2Types of international resource movementInternational investment flowsPortfolio

2、 investmentDirect investment and multinational corporationsInternational labor migration9 - 3Size of the flowsPortfolio investment (2003)Outflows: -$111 billionInflows: $790 billionDirect investment (2003)Outflows: -$173 billionInflows: $39 billionCurrent data from the Bureau of Economic AnalysisWWW

3、 link9 - 4Reasons for portfolio investmentA substitution for international tradeThe factor price equalization theory shows that factor returns should equalize after free trade.9 - 5Reasons for portfolio investmentA substitution for international tradeThe factor price equalization theory shows that f

4、actor returns should equalize after free trade.Full free trade may not occur.Non-tradable goodsTransactions costsGovernment restrictions on trade9 - 6Reasons for portfolio investmentA substitution for international tradeThe factor price equalization theory shows that factor returns should equalize a

5、fter free trade.Full free trade may not occur.Therefore, factor price equalization is unlikely to occur.9 - 7Reasons for portfolio investmentA substitution for international tradeThe factor price equalization theory shows that factor returns should equalize after free trade.Full free trade may not o

6、ccur.Therefore, factor price equalization is unlikely to occur.Portfolio investment takes advantage of the higher returns available in some nations.9 - 8Reasons for portfolio investmentA substitution for international tradeRisk diversificationPortfolio theory demonstrates that investing in securitie

7、s with yields that are uncorrelated over time offers an identical return at lower risk than investing in securities with correlated yields.9 - 9Reasons for direct investmentInternalize the returns to intellectual propertyExploit economies of scaleAvoidance of trade restrictions9 - 10Effects of forei

8、gn investmentGreater efficiency in the use of capital9 - 11Effects of foreign investmentGreater efficiency in the use of capitalAlters the balance of payments situationLarge net capital inflows must be balanced by a trade deficit.Large past capital inflows generate future current account outflows. 9

9、 - 12Effects of foreign investmentGreater efficiency in the use of capitalAlters the balance of payments situationAlters the pattern of tax collectionsThe capital providing nation experiences a fall in tax collections; the capital receiving nation an increase in tax collections.9 - 13Reasons for MNC

10、sMultinational corporations (MNCs) own, control, or manage production and distribution facilities in several countries.Cost advantages of MNCsIntegration may increase profits through better control of supply chains.9 - 14Reasons for MNCsMultinational corporations (MNCs) own, control, or manage produ

11、ction and distribution facilities in several countries.Cost advantages of MNCsIntegration may increase profits through better control of supply chains.The larger scale of production may allow the firm to better exploit economies of scale.9 - 15Reasons for MNCsMultinational corporations (MNCs) own, c

12、ontrol, or manage production and distribution facilities in several countries.Cost advantages of MNCsIntegration may increase profits through better control of supply chains.The larger scale of production may allow the firm to better exploit economies of scale.Intellectual property may be better mai

13、ntained by MNCs.9 - 16Reasons for MNCsCost advantages of MNCsIntegration may increase profits through better control of supply chains.The larger scale of production may allow the firm to better exploit economies of scale.Intellectual property may be better maintained by MNCs.MNCs can better direct p

14、roduction to low cost nations.9 - 17Reasons for MNCsCost advantages of MNCsThe larger scale of production may allow the firm to better exploit economies of scale.Intellectual property may be better maintained by MNCs.MNCs can better direct production to low cost nations.MNCs can artificially change

15、prices to only show profits in low tax nations.Transfer pricing9 - 18Problems of MNCsHome country problemsThe movement of jobs to other countries.9 - 19Problems of MNCsHome country problemsThe movement of jobs to other countries.MNCs may move technology out of the home country reducing the technolog

16、ical advantage of the home country.9 - 20Problems of MNCsHome country problemsThe movement of jobs to other countries.MNCs may move technology out of the home country reducing the technological advantage of the home country.Transfer pricing may reduce taxable e and tax revenue.9 - 21Problems of MNCs

17、Home country problemsThe movement of jobs to other countries.MNCs may move technology out of the home country reducing the technological advantage of the home country.Transfer pricing may reduce taxable e and tax revenue.Access for foreign markets allows MNCs to skirt domestic monetary and fiscal po

18、licy control.9 - 22Problems of MNCsHost country problemsHost country problemsLoss of domestic governance controlThe MNC may follow home rather than host country laws.Borrowing from abroad undermines host country ability to determine the macroeconomic environment.9 - 23Problems of MNCsHost country pr

19、oblemsHost country problemsLoss of domestic governance controlExposure to foreign goods and corporations may undermine the domestic culture.9 - 24Problems of MNCsHost country problemsHost country problemsLoss of domestic governance controlExposure to foreign goods and corporations may undermine the

20、domestic culture.Repatriated profits may undermine domestic capital expansion and R&D resulting in slower economic growth.9 - 25Reasons for labor migrationThe opportunity to earn higher wages9 - 26Reasons for labor migrationThe opportunity to earn higher wagesGreater educational opportunities9 - 27R

21、easons for labor migrationThe opportunity to earn higher wagesGreater educational opportunitiesEscape from political oppression or conflict9 - 28Costs of labor migrationMonetary costs of migrationLost wagesPayment for transportationPayment of fees for entry9 - 29Costs of labor migrationMonetary cost

22、s of migrationNon-monetary costs of migrationLoss of familyNeed to acculturate to new surroundings9 - 30Effects of labor migrationEffects on recipient countryIncreased ability to produceThe increase in the labor force increases productive ability by expanding one of the factors of production.The wor

23、kers may possess high levels of skills that enhance the recipient countrys human capital.H1-B visas in the U.S. target just such workers.9 - 31Effects of labor migrationEffects on recipient countryIncreased ability to produceDislocation of native workers competing with the new entrants to the labor

24、forceIncreased unemploymentLower wages9 - 32Effects of labor migrationEffects on recipient countryIncreased ability to produceDislocation of native workers competing with the new entrants to the labor forceImproved return to capital9 - 33Effects of labor migrationEffects on recipient countryEffects on the source countryLoss in domestic productive abilityThe decrease in the la