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2010/2011  KAN-AEF_AE41  The Firm in a Global Environment

English Title
The Firm in a Global Environment

Course Information

Language English
Point 7,5 ECTS (225 SAT)
Type Mandatory
Level Full Degree Master
Duration One Semester
Course Period Autumn
Time Table Please see course schedule at e-Campus
Study Board
Study Board for MSc in Economics and Business Administration
Course Coordinator
  • Pascalis Raimondos-Møller
    Pascalis Raimondos-Møller - Department of Economics
Main Category of the Course
  • Economics, macro economics and managerial economics
Last updated on 29 maj 2012
Learning Objectives
The course focuses on the international opportunities that a firm faces, viz. whether a firm will choose to export, invest abroad, or license its production abroad.
While these types of issues are central in any standard international trade course, the focus in these courses is usually at the country level and thus how trade affects the country in question. Our attempt here is to bring the firm at the forefront of the analysis, and highlight how global opportunities affect firms’ decisions. A central element of the course is to document that the internationalisation of the firm is an endogenous choice that accrues to the most efficient firms.
As it is well known, firms have several possibilities when they want to serve international markets. The course investigates the reasons for why firms choose to export their products rather than serving them by producing directly in that market (through a direct foreign investment). The existent literature provides several possible explanations of what makes firms decide to locate in a particular country (the comparative advantage hypothesis, the home-market effect, increasing returns to scale (internal or external to the firms), economic geography), and as such they will be reviewed in order to provide a comprehensive understanding of the location decision.
The Firm in a Global Environment
Marking Scale 7-step scale
Censorship Internal examiners
Exam Period December/January and February
The exam has the form of an individual 4-hour written, open book exam. (all written materials and calculators, but no computers, are allowed at the exam) Cf. The Regulations for written tests at CBS. The exam is internal and is graded by a teacher, cf. the General Degree Regulation § 25 S. no. 1. The regular exam takes place in December 2010. The make-up / re-exam takes place in February 2011
Prerequisites for Attending the Exam
Course Content

Comparative advantage; increasing returns to scale; home-market effect; outsourcing; multinational enterprises.

The course builds on knowledge from Microeconomics. Knowledge of International Economics will be helpful.

Students are required to
Analyse the opportunities that a firm faces with respect to location. This includes consideration of whether to export or to become a multinational. This decision in turn, includes evaluation of differences in production costs, taxes, tariffs and growth opportunities.
Understand the interaction between firms and firm and government or other institutions. This includes analysing the role and impact of government policy, of supranational policy, and of the presence of multilateral agents.
Be familiar with the theoretical models of international economic aspects covered in the course. This includes calculating numerical solutions to simple economic models and to provide intuition behind the results both verbally and through graphical representation.
Apply the taught theoretical models of international economic aspects to real world situations.


To be arranged in 2010. See e-campus for early information.