Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Multinationals and the Location of Production Project Link United Nations May 25, 2015

Daniel Trefler, Rotman School of Management, Project Link, UN May 25,

Daniel Trefler, Rotman School of Management, Project Link, UN May 25,

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Resource Flows to Developing Countries

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Netting Out M&A Activity: Developing Country FDI has Grown Steadily

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Winners and Losers from FDI Inflows in 2001

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Who Received FDI in 2001?

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Corporate Priorities: FDI in 2002 Most Favoured Destinations as a Percentage of MNE Responses

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Determinants of FDI, Location of Production and Trade FDI Human Capital TechnologyInstitutions Political Expropriation Contracting Environment

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Breaking Down the Value Chain

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, FDI and the Propagation of International Shocks

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, FDI and Deflation

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Asset Specificity and Relationship-Specific Investments Why is FDI so intense in just a handful of industries? Why is FDI so intense in just a handful of industries?

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Knowledge Creation and Control Who creates Knowledge? Who Controls Knowledge? Who creates Knowledge? Who Controls Knowledge?

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Sony’s Flat-Screen Cathode Ray Tube (CRT)

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, FDI, Trade and IPR Regimes

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Rent-Seeking Institutions Political Expropriations Legal / Contractual Environment Political Expropriations Legal / Contractual Environment

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, FDI, Trade and IPR Regimes

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Putting a Lid on Rent-Seeking Behaviour (Skilled Sector Tariffs) – (Unskilled Sector Tariffs) Long-Run Growth ( )

Daniel Trefler, Rotman School of Management, Project Link, UN May 25, Determinants of FDI, Location of Production and Trade FDI Human Capital TechnologyInstitutions Political Expropriation Contracting Environment

Daniel Trefler, Rotman School of Management, Project Link, UN May 25,  Virtually all of international trade in manufactures and services is done via multinationals. 1/3 is done within a firm, 1/3 is done at arm’s length in which both sides are MNCs and 1/3 is done at arm’s length in which one side is an MNC.  In short, the international location of production is determined by FDI.

Daniel Trefler, Rotman School of Management, Project Link, UN May 25,  In the 1990s FDI grew dramatically. The usual explanation is that it was driven by (in order of importance) technological forces related to the ability to direct a firm from a distance (ICT), the M&A wave which reflected changing managerial views about economies of scope versus core competence, FDI liberalization in developing countries, falling transportation costs, and trade liberalization.

Daniel Trefler, Rotman School of Management, Project Link, UN May 25,  After growing since 1991, FDI contracted substantially in  Causes (in order of importance): Bursting of the bubble with its implications for equity finances, especially M&A activity and the consolidation of core competences. Slowing of economic activity in the major industrial economies. Sept. 11, war, deflation, SARS