Brands in motion: How frictions shape multinational production

Keith Head (1) , Thierry Mayer (2)

1 Sauder - Sauder School of Business [British Columbia]
2 ECON - Département d'économie (Sciences Po)

Following the 2016 Leave vote in the referendum on UK membership in the EU and the election of Donald Trump, trade agreements have entered a period of great instability. To predict the impact of possible disruptions to existing arrangements requires counterfactual analysis that takes into account the complex set of factors influencing the production and marketing strategies of multinational corporations. We estimate a model of multinational decision-making in the car industry. This model predicts the production reallocation and consumer surplus consequences of changes in tariffs and non-tariff barriers induced by US-led protectionism, Brexit, transpacific, and transatlantic integration agreements.

Domains: Economics and Finance

Keith Head, Thierry Mayer. Brands in motion: How frictions shape multinational production. American Economic Review, 2019, 109 (9), pp.3073 - 3124. ⟨10.1257/aer.20161345⟩. ⟨hal-03391876⟩