The effects of multinationals on host economiesa computable general equilibrum approach

  1. Latorre Muñoz, María Concepción
  2. Bajo Rubio, Oscar
  3. Gómez Gómez-Plana, Antonio
Revista:
Papeles de trabajo del Instituto de Estudios Fiscales. Serie economía

ISSN: 1578-0252

Año de publicación: 2008

Número: 4

Páginas: 3-46

Tipo: Artículo

Otras publicaciones en: Papeles de trabajo del Instituto de Estudios Fiscales. Serie economía

Resumen

This paper offers a new perspective regarding the effects on a host economy of the entry of multinational enterprises (MNEs). We use a computable general equilibrium (CGE) approach, through a version of the GTAP model extended to incorporate MNEs. The analysis is applied to the Czech Republic, a country that has received substantial inflows of foreign direct investment in the last few years. A special attention has been paid to the issue of profit repatriation. We find that the negative effects of profit repatriation are sizeable, and might even offset the positive impact of the entry of MNEs.