The Multinational Firm

Posted: 7 Aug 2013

See all articles by Stephen R. Yeaple

Stephen R. Yeaple

Pennsylvania State University - College of the Liberal Arts - Department of Economic; National Bureau of Economic Research (NBER)

Date Written: January 2013


This article documents the recent advances in the international trade literature toward understanding the role of multinational firms in the conduct of international commerce. Over the past 10 years, we have developed a better understanding of the incentives firms face in their choice of production location, and we know more about the incentives that induce firms to vertically integrate. Furthermore, the theory literature has progressed from two-country models that cannot capture the richness of multinational firms’ activities to multicountry models that do. The empirics have advanced as well but at a slower pace. Progress has been slowed by the lack of comprehensive data and the difficulties of distinguishing between the various mechanisms proposed by theory.

Suggested Citation

Yeaple, Stephen R., The Multinational Firm (January 2013). Annual Review of Economics, Vol. 5, pp. 193-217, 2013, Available at SSRN: or

Stephen R. Yeaple (Contact Author)

Pennsylvania State University - College of the Liberal Arts - Department of Economic ( email )

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National Bureau of Economic Research (NBER)

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