When multinationals leave: A CGE analysis of the impact of divestments
| Autor: | Antonio Gómez Gómez-Plana, María C. Latorre |
|---|---|
| Přispěvatelé: | Universidad Pública de Navarra. Departamento de Economía, Nafarroako Unibertsitate Publikoa. Ekonomia Saila |
| Rok vydání: | 2013 |
| Předmět: |
Computable general equilibrium
FDI Social Sciences Disinvestments jel:F21 jel:C68 Foreign direct investment International trade jel:F23 Economics ddc:330 HB71-74 business.industry FDI disinvestments closures national acquisitions Spain National acquisitions International economics Economics as a science Spain Closures C68 F21 Christian ministry F23 business General Economics Econometrics and Finance Divestment |
| Zdroj: | Academica-e. Repositorio Institucional de la Universidad Pública de Navarra instname Economics : the Open-Access, Open-Assessment e-Journal (2013) Academica-e: Repositorio Institucional de la Universidad Pública de Navarra Universidad Pública de Navarra Economics : the Open-Access, Open-Assessment e-Journal (2014) |
| Popis: | Most studies on Multinational Enterprises (MNEs) focus on the impact of their expansion through inward or outward foreign direct investment (FDI) flows. However, divestments are quite common among the operations of MNEs. In order to derive their effects, we build a computable general equilibrium (CGE) model that includes two non-standard characteristics: the presence of MNEs and unemployment. The model is applied to the Spanish economy, where FDI inflows have surpassed divestments at the aggregate level in the period 2005-2009, although divestments have been sizeable in ten sectors. We analyse two different scenarios: 1) divestments that involve the closure of plants of foreign affiliates and 2) divestments where national firms buy the plant of foreign affiliates. The model allows estimating the overall impact of the divestments occurring simultaneously in ten sectors and in particular sectors. Results not only show that national acquisitions are less harmful than closures, but quantify those effects, and provide information on the role of the divesting sector. Some adjustment costs arise in all scenarios. Financial support from the Spanish Ministry of Economics and Competitiveness through the projects ECO 2011-24304 (A. G. Gómez-Plana) and ECO2011-29314-C02-02 (María C. Latorre) is gratefully acknowledged. |
| Databáze: | OpenAIRE |
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