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2012/2013  KAN-AEF_41  The Firm in a Global Environment

English Title
The Firm in a Global Environment

Course information

Language English
Exam ECTS 7.5 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Course period Spring
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 - Department of Economics
Main Category of the Course
  • Globalization, International Business, markets and studies
Last updated on 15-10-2012
Learning objectives
Students are required to:
  • Analyse the opportunities that a firm faces with respect to location when considering whether to export or to become a multinational, evaluation of differences in production costs, taxes, tariffs and growth opportunities.
  • Analyse the interaction between firms, and firm and government, in connection with becoming a multinational firm.
  • Explain the opportunities that multinational firms have in shifting profits, and how that could be constrained by government regulations.
  • Evaluate the positive and negative aspects of multinational firms.
  • Discuss the theoretical models of international aspects covered in the course.
  • Apply the taught theoretical models of international economic aspects to real world situations.
The Firm in a Global Environment:
Type of test Written Exam
Marking scale 7-step scale
Second examiner No second examiner
Exam period April and May/June
Aids Open Book, Written and Electronic Aid is permitted
Duration 4 Hours
Open book, written aids and calculators are permitted, but no PCs and mobile phones.
Course content

The course focuses on the most profund example that we have of how firms operate in the global economy, viz. multinational enterprises.
The first half of the course focuses on positive aspects of multinationals' behaviour, i.e. what determines their choices of where to produce, and how to to serve foreign markets: exporting, investing abroad, or licensing its production abroad.  A central element of the course is to document that becoming multinational is an endogenous choice that accrues to the most efficient firms.
The second half of the course focuses on normative aspects of multinationals' behaviour, i.e. whether there are positive productivity spillover effects to domestic firms from attracting multinationals and, moreover, whether multinationals can be easily regulated by domestic governments. Within this latter issue, we focus on whether there exists a, so-called, race-to-the-bottom type of externality with respect to corporate income taxation.

Multinational Firms, Foreign Direct Investment, Locational Theories, Productivity Spillovers, Tax Competiton, Fiscal Externalities.

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

Teaching methods
Lectures mixed with exercices.
Expected literature
Preliminary literature.
Last updated on 15-10-2012