International Joint Ventures and the Boundaries of the Firm
Опубликовано на портале: 22-12-2003
NBER Working Paper Series.
2002.
w9115.
Организация:
National Bureau of Economic Research (NBER)Тематический раздел:
This paper analyzes the determinants of partial ownership of the foreign affiliates
of U.S. multinational firms and, in particular, why partial ownership has declined
markedly over the last 20 years. The evidence indicates that whole ownership is most
common when firms coordinate integrated production activities across different locations,
transfer technology, and benefit from worldwide tax planning. Since operations and
ownership levels are jointly determined, it is necessary to use the liberalization
of ownership restrictions by host countries and the imposition of joint venture tax
penalties in the U.S. Tax Reform Act of 1986 as instruments for ownership levels
in order to identify these effects. Firms responded to these regulatory and tax changes
by expanding the volume of their intrafirm trade as well as the extent of whole ownership;
four percent greater subsequent sole ownership of affiliates is associated with three
percent higher intrafirm trade volumes. The implied complementarity of whole ownership
and intrafirm trade suggests that reduced costs of coordinating global operations,
together with regulatory and tax changes, gave rise to the sharply declining propensity
of American firms to organize their foreign operations as joint ventures over the
last two decades. The forces of globalization appear to have increased the desire
of multinationals to structure many transactions inside firms rather than through
exchanges involving other parties.
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