Power in the Multinational Corporation in Industry Equilibrium

Recent theories of the multinational corporation introduce the property rights model of the firm and examine whether to integrate our outsource firm activities locally or to a foreign country. This paper focus instead on the internal organization of the multinational corporation by examining the power allocation between headquarters and subsidiaries. We provide a framework to analyse the interaction between the decision to serve the local market by exporting or FDI, market acces and the optimal mode of organization of the multinational corporation. We find that subsidiary managers are given most autonomy in their decision how to run the firm at intermediate levels of local competition. We then provide comparative statics for changes in fixed FDI entry costs and trade costs, information technology, the number of local competitors, and in the size of the local market

Renal toxicity in patients with multiple myeloma receiving zoledronic acid vs. ibandronate: A retrospective medical records review

Aims : This retrospective study investigated the rates of renal impairment in patients with multiple myeloma treated with zoledronic acid and ibandronate. Materials and Methods : We retrospectively reviewed medical records in a German oncology clinic, from May 2001 to December 2005. Creatinine measurements were analyzed from baseline (before zoledronic acid or ibandronate treatment) to last evaluation for each patient. A total of 84 patients were included. Results : Zoledronic acid increased the risk of renal impairment by approximately 3-fold compared with ibandronate (renal impairment rates: zoledronic acid 37.7% vs. ibandronate 10.5%, relative risk [RR]=3.6, P=0.0029 serum creatinine [SCr]; 62.3% vs. 23.7%, RR=2.6, P=0.0001 glomerular filtration rate [GFR]). Ibandronate-treated patients switched from zoledronic acid had a significantly higher risk of renal impairment than patients receiving ibandronate monotherapy (zoledronic acid over ibandronate 39.1% vs. ibandronate monotherapy 6.7%, RR= 5.9, P=0.028 [SCr]; 65.2% vs 26.7%, RR=2.4, P=0.022 [GFR]). Multivariate analysis found significantly higher hazard ratios for zoledronic acid over ibandronate (SCr: Cox = 4.38, P=0.01; Andersen-Gill=8.22, P < 0.01; GFR: Cox = 4.31, P < 0.01; Andersen-Gill = 3.71, P < 0.01). Conclusions : Overall, this retrospective study suggests that multiple myeloma patients are more likely to experience renal impairment with zoledronic acid than with ibandronate. The risk of renal impairment increased if patients had received prior therapy with zoledronic acid

Temporary Shocks and Offshoring: The Role of External Economies and Firm Heterogeneity

We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country as a potential host for outsourcing activities can create a lock in effect, whereby late movers have a comparative disadvantage. Furthermore, the existence of firm heterogeneity along with externalities can help explain the dynamic process of offshoring, where the most productive firms offshore first and the others follow later. Finally, we work out some unexpected welfare implications which show that net industry profits can be lower in an outsourcing equilibrium than in a regime of no outsourcing. Consumer welfare rises, and under fairly plausible conditions this effect can offset the negative impact on profits

Outsourcing with debt financing

This paper investigates the effect of capital structure on a firm’s choice between vertical integration and outsourcing. We model the production decision in a Principal-Agent framework and show that suppliers use debt as a strategic instrument to collect the surplus from outsourcing as their wealth constraint or limited liability ensures them more attractive compensation schemes. Investigating the buyer’s capital structure, we find that outsourcing with risky debt is more likely to occur for high values of the outsourcing surplus.info:eu-repo/semantics/publishedVersio

Banking across Borders with Heterogeneous Banks

Individual banks differ substantially in their foreign operations. This paper introduces heterogeneous banks into a general equilibrium framework of banking across borders to explain the documented variation. While the model matches existing micro and macro evidence, novel and unexplored predictions of the theory are also strongly supported by the data: The efficiency of the least efficient bank active in a host country increases the greater the impediments to banking across borders and the efficiency of the banking sector in the host country. There is also evidence of a tradeoff between proximity and fixed costs in banking. Banks hold more assets and liabilities in foreign affiliates relative to cross-border positions if the target country is further away and the cost of foreign direct investment is low. These results suggest that fixed costs play a crucial role in the foreign activities of banks