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Multinational firms : easy come, easy go?

Haaland, Jan Ingvald Meidell; Ian, Wooton
Working paper
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URI
http://hdl.handle.net/11250/162972
Date
2000-10
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  • Discussion papers (SAM) [640]
Abstract
Although many countries welcome inward investments by multinational firms

(MNEs), it is often perceived that MNEs readily close down production in bad

times. We study the choice of an MNE in deciding whether to establish a

branch plant within a region, explicitly taking into account exit, as well as

entry, costs. Protecting workers by having strict lay-off rules deters potential

investment while subsidies attract it. We examine the policy trade-off for a

host government and investigate how uncertainty affects the attractiveness of

investment in a particular location. Just how much does the ease of exit influence the entry decision?
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2000:19

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