国际贸易双语教案问题答案Pugel_14_SG_AKEY (15)

CHAPTER 15

MULTINATIONALS AND MIGRATION:

INTERNATIONAL FACTOR MOVEMENTS

Objectives of the Chapter

A necessary condition for world output to be maximized is the free mobility of factors of production to the places where their productivity—and so, presumably, income—are the highest. This is relatively uncomplicated within nations. Factor movements between nations are an entirely different matter. In fact, many countries wrestle with whether to encourage factor migration or to restrict it. As we have seen with international trade in goods, we will find that not everyone benefits from the international migration of factors of production.

Chapter 15 explores the motives for, and implications of, the movement of capital and labor across national borders. It is important to remember, however, that the economic analysis of these flows must be supplemented by sociological and political considerations in order to understand the different treatment of internal versus international factor migration.

After studying Chapter 15, you should be able to

1. describe the historical and geographical patterns of foreign direct investment.

2. explain why a firm might choose a policy of FDI in a host country over one of exporting goods

produced in the home country.

3. analyze the welfare effects of FDI in both the home and host countries, and describe how the

choice to subsidize or tax FDI depends on considerations of market power, externalities, and

politics.

4. illustrate and explain the welfare effects of labor migration on both the sending country and the

receiving country.

5. discuss the positive and negative externalities generated by international migration.

6. relate the economic and political outcomes of immigration for the emigrants and for the residents

of the receiving country.

Important Concepts

Brain drain:The emigration, mainly from developing countries, of highly skilled

and educated people to higher-wage industrialized countries.

FDI:Foreign direct investment. A flow of lending to, or purchase of

ownership in, a new or existing foreign enterprise. To qualify as FDI,

the investment must represent at least 10% of the value of the firm,

and the investor is presumed to have the ability to exert some control

over the firm.

Firm-specific advantages:Managerial, technical, and marketing skills and patents that accrue to a

particular firm and that help it overcome the inherent native

advantages of local rival firms.