Pugel 17e · International Trade
Chapter 15 · Multinationals and Migration: International Factor Movements
Multinationals and Migration: International Factor Movements This chapter provides a survey of the economics of foreign direct investment (FDI) and the economics of labor migration. Foreign direct investment is a flow of funding provided by an investor (usually a firm) to establish or acquire a foreign company or to finance an existing foreign company that the investor owns. Ownership is important because the investor has or acquires the power to have a substantial influence on the management of the foreign company.
教材导入与手册摘录
Multinationals and Migration: International Factor Movements
This chapter provides a survey of the economics of foreign direct investment (FDI) and the economics of labor migration.
Foreign direct investment is a flow of funding provided by an investor (usually a firm) to establish or acquire a foreign company or to finance an existing foreign company that the investor owns. Ownership is important because the investor has or acquires the power to have a substantial influence on the management of the foreign company. The share of the equity of the foreign company that the investor must own to have substantial influence on management is probably less than 50 percent. The standard (arbitrary) minimum amount used by most countries to define FDI is 10 percent of the equity of the foreign company. (FDI may also refer to the stock of such investments in existence at a point in time.)
A multinational enterprise (MNE) is a firm that owns and controls operations in more than one country. Thus, FDI is a way that the parent company of the MNE can finance its foreign affiliates. However, an MNE is more than just a way to move financial capital between countries. The foreign affiliate (subsidiary or branch) often receives managerial skills and methods, technology and trade secrets, marketing capabilities and brand names, and instructions about business practices from its parent company. Often much of the financing of the affiliate is raised locally, perhaps to reduce exposure to exchange rate risk or to the risk of expropriation by the host-country government.
核心知识点
Foreign Direct Investment
This chapter provides a survey of the economics of foreign direct investment (FDI) and the economics of labor migration.
- FDI is funding provided by investors (usually firms) to establish or acquire foreign companies or to expand or finance existing foreign companies that the investors own.
- Key is sufficient ownership to control or influence the management of the foreign company. The agreed international standard is at least 10 percent ownership.
Multinational Enterprises
Multinationals and Migration: International Factor Movements
- A MNE is a firm that owns and controls operations in more than one country.
- parent firm
- of the MNE is located in the
FDI: History and Current Patterns
Are Immigrants a Fiscal Burden?: These characteristics matter for the (current) fiscal effects of the immigrants. Because they are young, immigrants will pay relatively large amounts of social security taxes while drawing few social security (pension) benefits. Because they have low wage rates, they will tend to pay low income taxes (and similar taxes like sales or value added taxes).
- FDI is funding provided by investors (usually firms) to establish or acquire foreign companies or to expand or finance existing foreign companies that the investors own.
- Key is sufficient ownership to control or influence the management of the foreign company. The agreed international standard is at least 10 percent ownership.
MNEs and International Trade
What explains why MNEs exist? Purely financial theories cannot explain MNEs because they cannot explain why managerial control over the foreign affiliates, with its focus on production and marketing, is necessary if the goal is only to move capital from one country to another in pursuit of higher returns or diversification of risk.
- A MNE is a firm that owns and controls operations in more than one country.
- parent firm
- of the MNE is located in the
Should the Host Country Restrict FDI Inflows?
Economic analysis suggests that the host country gains from inward FDI, even if the profits of the local affiliates do not belong to the host country, and even though some local competitors may be harmed by the competition from the affiliates. There is some case for the host-country government to tax or restrict inward FDI, because of fear of the local political power of the foreign multinationals, or to impose an optimal tax on the affiliate’s profits.
- Standard static analysis of FDI finds:
- Workers in the host country gain from increased demand for their services, as do other suppliers of inputs to the affiliates of foreign multinationals.
- The host country government gains from taxes collected on affiliate profits, as long as these exceed the extra costs of any additional government services provided to the affiliates.
Migration
Multinationals and Migration: International Factor Movements
- Multinationals and Migration: International Factor Movements
案例与应用
The latter part of the chapter examines international migration, includi ...
The latter part of the chapter examines international migration, including the benefits and the costs to the migrants, the effects of migration on other groups and on the sending and receiving countries overall, the fiscal effects of migration, and government policies toward migration. For the United States and Canada, immigration was relatively large until the 1920s, was low in the 1930s, and has been higher since the 1950s.
查看教材摘录
The latter part of the chapter examines international migration, including the benefits and the costs to the migrants, the effects of migration on other groups and on the sending and receiving countries overall, the fiscal effects of migration, and government policies toward migration. For the United States and Canada, immigration was relatively large until the 1920s, was low in the 1930s, and has been higher since the 1950s. For the shorter history of the European Union, immigration was curtailed in the mid-1970s and early 1980s, but has increased again since the late 1980s.
10.Agree or disagree, depending on whether you think the import-reducing ...
10.Agree or disagree, depending on whether you think the import-reducing effects or the import-increasing effects are larger. As Chinese companies expand their FDI into the United States, the growing operations of Chinese companies in the United States are likely to have several effects on U.S. imports from China. On the one hand, U.S.
查看教材摘录
10.Agree or disagree, depending on whether you think the import-reducing effects or the import-increasing effects are larger. As Chinese companies expand their FDI into the United States, the growing operations of Chinese companies in the United States are likely to have several effects on U.S. imports from China. On the one hand, U.S. imports would tend to decrease, because U.S. production in the U.S. affiliates of Chinese companies could replace some products that otherwise would have been imported from China. On the other hand, two effects would tend to increase U.S. imports from China. U.S. production in the affiliates of Chinese companies could lead to importing machinery, components, and materials from China. And, the U.S. affiliates of Chinese companies could improve the marketing of the Chinese companies’ products in the United States. If some of these products are not made in th
11.First, in 1924, the United States passed a law that severely ...
11.First, in 1924, the United States passed a law that severely restricted immigration, using a system of quotas by national origin. Second, the Great Depression, with its very high rates of labor unemployment, probably reduced the economic incentive to immigrate because potential immigrants would expect that it would be very difficult to find employment.
查看教材摘录
11.First, in 1924, the United States passed a law that severely restricted immigration, using a system of quotas by national origin. Second, the Great Depression, with its very high rates of labor unemployment, probably reduced the economic incentive to immigrate because potential immigrants would expect that it would be very difficult to find employment.
The analysis has implications for the policies used by receiving countri ...
The analysis has implications for the policies used by receiving countries to limit immigration. First, the types of immigrant admitted have an impact on which native group suffers loss. Second, the types of immigrants admitted have an impact on the net fiscal effects. To gain greater fiscal benefits (and to minimize the negative impact on low-skilled native workers who already have low earnings), the receiving country should skew its immigration policies to favor young adults with some college education.
查看教材摘录
The analysis has implications for the policies used by receiving countries to limit immigration. First, the types of immigrant admitted have an impact on which native group suffers loss. Second, the types of immigrants admitted have an impact on the net fiscal effects. To gain greater fiscal benefits (and to minimize the negative impact on low-skilled native workers who already have low earnings), the receiving country should skew its immigration policies to favor young adults with some college education. However, for countries like the United States, this would mean shifting away from other worthy goals pursued by their current immigration policies, including family reunification and assisting refugees. Tips
课件纲要
- Foreign Direct Investment (FDI)
- Multinational Enterprises (MNEs)
- FDI: Flows and Stocks
- Why Do Multinational Enterprises (MNEs) Exist?
- Taxation of MNEs’ Profits
- MNEs and International Trade
- Should the Home Country Restrict FDI Outflows?
- Should the Host Country Restrict FDI Inflows?
- Migration
- Gross Immigration Rates into the U.S., 1820-2017, and Canada, 1852-2017
- Net Immigration Rates into the European Union, 1960-2017
- How Migration Affects Labor Markets
习题精选
题目 1
Which of the following is an example of foreign direct investment?
- A Ford motor company puts $10 million from its pension fund into a mutual fund containing shares of foreign companies.
- B Dr. Gareau, a French biologist, buys $5,000 worth of shares of Toyota.
- C Wells Fargo Bank buys $10 million worth of Bank of England T-Bills.
- D Ford buys a controlling interest in Peugeot Citroën, a French automobile company.
答案：D · Ford buys a controlling interest in Peugeot Citroën, a French automobile company.
题目 2
Foreign direct investment (FDI) refers to
- A the flow of funding provided by an investor or lender to establish or acquire a foreign company or to expand or finance an existing foreign company that the investor owns and controls.
- B the hot money that an investor needs to get registered in a foreign stock exchange to make investments and have the liberty to sell stocks purchased earlier.
- C a method of funding business adopted by a foreign investor by participating directly in the secondary markets of a country, through investments in the country's stocks or bonds.
- D the passive holding of securities such as foreign stocks, bonds, or other financial assets, none of which entails active management or control of the securities issued by the investor.
答案：A · the flow of funding provided by an investor or lender to establish or acquire a foreign company or to expand or finance an existing foreign company that the investor owns and controls.
题目 3
A firm that owns and controls operations in more than one country is a(n)
- A franchise.
- B MNE.
- C monopolist.
- D cross-border business alliance.
答案：B · MNE.
题目 4
Which of the following is true for a multinational enterprise (MNE)?
- A Its affiliates usually get nearly all of their financing from the direct investment flows.
- B It usually transfers its liabilities to its foreign subsidiaries.
- C Its home-country tax burden is mostly borne by its foreign affiliates.
- D It usually provides intangible assets to its affiliates for their usage.
答案：D · It usually provides intangible assets to its affiliates for their usage.
题目 5
Financing from the parent company to its foreign affiliates is generally a small percentage of total funding because
- A the returns on such investment are taxed at very high rates.
- B the parent firm wants to reduce the risks to which its foreign activities are exposed.
- C most foreign governments have imposed quotas of foreign investment in their domestic economy.
- D most major home-country governments limit investment in foreign firms by their domestic firms.
答案：B · the parent firm wants to reduce the risks to which its foreign activities are exposed.
题目 6
Which of the following ways can a multinational enterprise (MNE) adopt to reduce its exposure to political risks in its host country?
- A By threatening to cease all exports of its products to the host country
- B By establishing more than one affiliate in the host country
- C By equating its physical assets in the host country with its local borrowings
- D By negotiating with the host country's government to clear off its debts
答案：C · By equating its physical assets in the host country with its local borrowings
题目 7
At the end of 2016, most of the United States' foreign direct investment was in
- A the other North American Free Trade Agreement (NAFTA) countries.
- B the developing countries in Asia.
- C the European Union countries.
- D the Latin American countries.
答案：C · the European Union countries.
题目 8
Most foreign direct investment is in
- A the agricultural sector.
- B the manufacturing sector.
- C the mining and extraction sector.
- D the service sector.
答案：D · the service sector.
题目 9
Which of the following statements is true concerning the global flow of foreign direct investment (FDI) since 1990?
- A The proportion of global FDI that flowed into developing countries increased.
- B Mexico has received more FDI inflows than has the United States.
- C The proportion of global FDI that flowed into the United States increased.
- D FDI flows into and within the European Union fell.
答案：A · The proportion of global FDI that flowed into developing countries increased.
题目 10
Which of the following provides a good explanation of why multinational firms exist?
- A Location factors that favor exporting over foreign production
- B The need to shift financial capital between countries
- C Internalization advantages that favor direct investment over contracting with independent foreign firms
- D Firms lack inherent knowledge of foreign laws, procedures, and practices.
答案：C · Internalization advantages that favor direct investment over contracting with independent foreign firms
题目 11
Which of the following is an inherent disadvantage to being a multinational enterprise (MNE)?
- A An MNE does not initially have the native understanding of local laws, customs, procedures, practices, and relationships.
- B An MNE does not have the same assets as those held by its local competitors in the host market.
- C An MNE does not enjoy comparative advantages in the same goods as those of its local competitors in the host market.
- D An MNE's profits are doubly taxed by two governments.
答案：A · An MNE does not initially have the native understanding of local laws, customs, procedures, practices, and relationships.
题目 12
How can an MNE overcome its inherent disadvantages?
- A By borrowing funds from the host country rather than transferring funds from the parent firm
- B By producing more than two products in which it has comparative advantage
- C By expanding its operation in more than two host countries
- D By owning one or more assets that are not owned by its local competitors in the host country
答案：D · By owning one or more assets that are not owned by its local competitors in the host country
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# 第15章 Multinationals and Migration: International Factor Movements ## 章节概览 Multinationals and Migration: International Factor Movements This chapter provides a survey of the economics of foreign direct investment (FDI) and the economics of labor migration. Foreign direct investment is a flow of funding provided by an investor (usually a firm) to establish or acquire a foreign company or to finance an existing foreign company that the investor owns. Ownership is important because the investor has or acquires the power to have a substantial influence on the management of the foreign company. ## 知识点 ### 1. Foreign Direct Investment - 教学说明：This chapter provides a survey of the economics of foreign direct investment (FDI) and the economics of labor migration. - 支撑要点：FDI is funding provided by investors (usually firms) to establish or acquire foreign companies or to expand or finance existing foreign companies that the investors own. - 支撑要点：Key is sufficient ownership to control or influence the management of the foreign company. The agreed international standard is at least 10 percent ownership. - 来源类型：manual ### 2. Multinational Enterprises - 教学说明：Multinationals and Migration: International Factor Movements - 支撑要点：A MNE is a firm that owns and controls operations in more than one country. - 支撑要点：parent firm - 支撑要点：of the MNE is located in the - 来源类型：manual ### 3. FDI: History and Current Patterns - 教学说明：Are Immigrants a Fiscal Burden?: These characteristics matter for the (current) fiscal effects of the immigrants. Because they are young, immigrants will pay relatively large amounts of social security taxes while drawing few social security (pension) benefits. Because they have low wage rates, they will tend to pay low income taxes (and similar taxes like sales or value added taxes). - 支撑要点：FDI is funding provided by investors (usually firms) to establish or acquire foreign companies or to expand or finance existing foreign companies that the investors own. - 支撑要点：Key is sufficient ownership to control or influence the management of the foreign company. The agreed international standard is at least 10 percent ownership. - 来源类型：manual ### 4. MNEs and International Trade - 教学说明：What explains why MNEs exist? Purely financial theories cannot explain MNEs because they cannot explain why managerial control over the foreign affiliates, with its focus on production and marketing, is necessary if the goal is only to move capital from one country to another in pursuit of higher returns or diversification of risk. - 支撑要点：A MNE is a firm that owns and controls operations in more than one country. - 支撑要点：parent firm - 支撑要点：of the MNE is located in the - 来源类型：manual ### 5. Should the Host Country Restrict FDI Inflows? - 教学说明：Economic analysis suggests that the host country gains from inward FDI, even if the profits of the local affiliates do not belong to the host country, and even though some local competitors may be harmed by the competition from the affiliates. There is some case for the host-country government to tax or restrict inward FDI, because of fear of the local political power of the foreign multinationals, or to impose an optimal tax on the affiliate’s profits. - 支撑要点：Standard static analysis of FDI finds: - 支撑要点：Workers in the host country gain from increased demand for their services, as do other suppliers of inputs to the affiliates of foreign multinationals. - 支撑要点：The host country government gains from taxes collected on affiliate profits, as long as these exceed the extra costs of any additional government services provided to the affiliates. - 来源类型：manual ### 6. Migration - 教学说明：Multinationals and Migration: International Factor Movements - 支撑要点：Multinationals and Migration: International Factor Movements - 来源类型：manual ## 案例 ### 案例 1: The latter part of the chapter examines international migration, includi ... The latter part of the chapter examines international migration, including the benefits and the costs to the migrants, the effects of migration on other groups and on the sending and receiving countries overall, the fiscal effects of migration, and government policies toward migration. For the United States and Canada, immigration was relatively large until the 1920s, was low in the 1930s, and has been higher since the 1950s. ### 案例 2: 10.Agree or disagree, depending on whether you think the import-reducing ... 10.Agree or disagree, depending on whether you think the import-reducing effects or the import-increasing effects are larger. As Chinese companies expand their FDI into the United States, the growing operations of Chinese companies in the United States are likely to have several effects on U.S. imports from China. On the one hand, U.S. ### 案例 3: 11.First, in 1924, the United States passed a law that severely ... 11.First, in 1924, the United States passed a law that severely restricted immigration, using a system of quotas by national origin. Second, the Great Depression, with its very high rates of labor unemployment, probably reduced the economic incentive to immigrate because potential immigrants would expect that it would be very difficult to find employment. ### 案例 4: The analysis has implications for the policies used by receiving countri ... The analysis has implications for the policies used by receiving countries to limit immigration. First, the types of immigrant admitted have an impact on which native group suffers loss. Second, the types of immigrants admitted have an impact on the net fiscal effects. To gain greater fiscal benefits (and to minimize the negative impact on low-skilled native workers who already have low earnings), the receiving country should skew its immigration policies to favor young adults with some college education. ## 习题 ### 题目 1 Which of the following is an example of foreign direct investment? - A) Ford motor company puts $10 million from its pension fund into a mutual fund containing shares of foreign companies. - B) Dr. Gareau, a French biologist, buys $5,000 worth of shares of Toyota. - C) Wells Fargo Bank buys $10 million worth of Bank of England T-Bills. - D) Ford buys a controlling interest in Peugeot Citroën, a French automobile company. ### 题目 2 Foreign direct investment (FDI) refers to - A) the flow of funding provided by an investor or lender to establish or acquire a foreign company or to expand or finance an existing foreign company that the investor owns and controls. - B) the hot money that an investor needs to get registered in a foreign stock exchange to make investments and have the liberty to sell stocks purchased earlier. - C) a method of funding business adopted by a foreign investor by participating directly in the secondary markets of a country, through investments in the country's stocks or bonds. - D) the passive holding of securities such as foreign stocks, bonds, or other financial assets, none of which entails active management or control of the securities issued by the investor. ### 题目 3 A firm that owns and controls operations in more than one country is a(n) - A) franchise. - B) MNE. - C) monopolist. - D) cross-border business alliance. ### 题目 4 Which of the following is true for a multinational enterprise (MNE)? - A) Its affiliates usually get nearly all of their financing from the direct investment flows. - B) It usually transfers its liabilities to its foreign subsidiaries. - C) Its home-country tax burden is mostly borne by its foreign affiliates. - D) It usually provides intangible assets to its affiliates for their usage. ### 题目 5 Financing from the parent company to its foreign affiliates is generally a small percentage of total funding because - A) the returns on such investment are taxed at very high rates. - B) the parent firm wants to reduce the risks to which its foreign activities are exposed. - C) most foreign governments have imposed quotas of foreign investment in their domestic economy. - D) most major home-country governments limit investment in foreign firms by their domestic firms. ### 题目 6 Which of the following ways can a multinational enterprise (MNE) adopt to reduce its exposure to political risks in its host country? - A) By threatening to cease all exports of its products to the host country - B) By establishing more than one affiliate in the host country - C) By equating its physical assets in the host country with its local borrowings - D) By negotiating with the host country's government to clear off its debts ### 题目 7 At the end of 2016, most of the United States' foreign direct investment was in - A) the other North American Free Trade Agreement (NAFTA) countries. - B) the developing countries in Asia. - C) the European Union countries. - D) the Latin American countries. ### 题目 8 Most foreign direct investment is in - A) the agricultural sector. - B) the manufacturing sector. - C) the mining and extraction sector. - D) the service sector. ## 参考答案 - 题目 1: 答案：D | 选项内容：Ford buys a controlling interest in Peugeot Citroën, a French automobile company. | Topic：Foreign Direct Investment | Difficulty：2 Medium - 题目 2: 答案：A | 选项内容：the flow of funding provided by an investor or lender to establish or acquire a foreign company or to expand or finance an existing foreign company that the investor owns and controls. | Topic：Foreign Direct Investment | Difficulty：1 Easy - 题目 3: 答案：B | 选项内容：MNE. | Topic：Multinational Enterprises | Difficulty：1 Easy - 题目 4: 答案：D | 选项内容：It usually provides intangible assets to its affiliates for their usage. | Topic：Multinational Enterprises | Difficulty：1 Easy - 题目 5: 答案：B | 选项内容：the parent firm wants to reduce the risks to which its foreign activities are exposed. | Topic：Multinational Enterprises | Difficulty：2 Medium - 题目 6: 答案：C | 选项内容：By equating its physical assets in the host country with its local borrowings | Topic：Multinational Enterprises | Difficulty：1 Easy - 题目 7: 答案：C | 选项内容：the European Union countries. | Topic：FDI: History and Current Patterns | Difficulty：1 Easy - 题目 8: 答案：D | 选项内容：the service sector. | Topic：FDI: History and Current Patterns | Difficulty：1 Easy ## AI / NextLab 使用建议 - Specific Factors Shock Lab：将《Multinationals and Migration: International Factor Movements》对应的理论或政策机制放到贸易分析实验室中做交互式验证。 https://digitconnection.ai/nextlab/