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  3. American Economic Review
  4. September 2019
  5. Brands in Motion: How Frictions Shape Multinational Production

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Brands in Motion: How Frictions Shape Multinational Production

  • Keith Head
  • Thierry Mayer
American Economic Review
vol. 109, no. 9, September 2019
(pp. 3073–3124)
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Abstract

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.

Citation

Head, Keith, and Thierry Mayer. 2019. "Brands in Motion: How Frictions Shape Multinational Production." American Economic Review, 109 (9): 3073–3124. DOI: 10.1257/aer.20161345

Additional Materials

JEL Classification

  • F13 Trade Policy; International Trade Organizations
  • F23 Multinational Firms; International Business
  • L21 Business Objectives of the Firm
  • L62 Automobiles; Other Transportation Equipment; Related Parts and Equipment
  • M31 Marketing