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2011/2012  KAN-OE24  The Global Firm

English Title
The Global Firm

Course Information

Language English
Point 7,5 ECTS (225 SAT)
Type Mandatory
Level Full Degree Master
Duration One Semester
Course Period Spring
Time Table Please see course schedule at e-Campus
Max. participants 25
Study Board
Study Board for MSc in Advanced Economics and Finance
Course Coordinator
  • Paul Duo Deng - Department of Economics
Main Category of the Course
  • Economics, macro economics and managerial economics
Last updated on 29 maj 2012
Learning Objectives
Students are required to:
  • Analyse firms’ incentives to go multinational and their decision choices. This includes choices between export, licensing and FDI, choices between horizontal and vertical FDI. Then how the decisions in turn impact on host countries.
  • Analyse the policy choices faced by governments in the presence of internationally mobile firms
  • Apply theoretical models taught in class to real world problems
  • Explain empirical findings on firms’ internationalisation behaviour, and
  • Develop new hypotheses on unexplained trends.
The Global Firm
The exam in the subject consists of two parts:
Term paper:
Weight 40%
Assessment Home Assignment
Marking Scale 7-step scale
Censorship No censorship
Exam Period May/June
Aids Please, see the detailed regulations below
Duration Please, see the detailed regulations below

The term paper is an individual work written in English, and the main objective is that the student documents her/his ability to do independent reseach-oriented work by reading and analyzing reseach papers. The paper is a research paper and the student is expected to make her/his own analysis based on data and/or information collected elsewhere. However, the paper must be created entirely by the student. Hence, a paper must contain original work, never submitted in any other venue in whole or part by the student or anyone else. The student may not work with anyone else on the paper and may not use any other student's paper as a model, reference, or template for her/his own paper.
The length of the paper should be 8-10 pages (max. 10)
The topic of the paper should be approved by the teacher, and after the approval, the student has 3 weeks to finish the paper. During these weeks the student is entitled to 1 hour of supervison by the teacher.
The paper should focus on an empirical, relevant question. It could be a more general question about firm behavior in a global environment, or it could be a question related to firms in a specific industry or specific country.

Final exam:
Weight 60%
Assessment Written Exam
Marking Scale 7-step scale
Censorship No censorship
Exam Period May/June
Aids Closed Book
Duration 4 Hours
The student is expected to be able to present and apply the models and theories from the required readings of the course. The student should be able to apply the models algebraically (ie. make calculations within a model framework) as well as verbally.
Course Content

Why do some firms become global while others just stay domestic? Why do some choose to outsource production to other firms while others produce everything inside the firm? Are exporting firms more productive firms or are they just firms with a good product? How does the presence of multinational firms shape government policies?These are some of the questions that will be answered in “The Global Firm” course. The course partly builds on recent developments in international trade theory that put emphasis on firm behaviour and characteristics rather than country characteristics (the standard international economics approach) and partly draws on contributions in international taxation. Using modern theories of firm heterogeneity and incomplete contracting, the course will bring together views on firms’ internationalisation behaviour.

Teaching Methods
The format of the course is based on the following elements:
• Lectures
• Discussions in class
• Term paper
Student Workload
SAT 225 hours
Further Information
Part of this course may also be taken as a Phd course by a limited number of Phd students.