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2014/2015  KAN-CAEFO1075U  The Firm in a Global Environment

English Title
The Firm in a Global Environment

Course information

Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Course period Spring
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Søren Bo Nielsen - Department of Economics (ECON)
Main academic disciplines
  • Globalization, International Business, markets and studies
Last updated on 08-07-2014
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:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period April and May/June
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Additional allowed aids
  • Books and compendia brought by the examinee
  • Notes brought by the examinee
  • Allowed calculators
  • Allowed dictionaries
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Course content and structure

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.
Last updated on 08-07-2014