A comparison of national vs. multinational firms� performance using a general equilibrium perspective

Resumen

The main contribution of this paper is the use of a computable general equilibrium perspective to compare the performance of national firms and multinationals (MNEs). We replicate the arrival of MNEs to different sectors of the Czech Republic in turn and analyse the responses of both types of firms across the 20 different sectors in which the Czech economy has been split. The higher labour intensity of national firms leads them to different patterns of production and labour demand, compared to MNEs operating within the same sector. The demand side of the model (particularly, exports and private consumption), drives the evolution of production and labour demand across sectors. Regarding prices, we also find a differential pattern between both types of firms within and across sectors. Our analysis offers detailed evidence on how the impact of MNEs will differ depending on the sector to which they arrive.