From Heterogeneous Firms to MNCs via Export-learning & FDI

Internationalisation is a gradual process in which firms, having built up a strong domestic base, learn how to export to serve foreign markets, before investing directly in a low-cost location.  In this process, innovation, productivity and policies play an important role in achieving a positive outcome.

Assistant Professor Amanda Jakobsson from SMU’s School of Economics, whose areas of expertise include International Trade, Multinational Companies and General Equilibrium Theory, has recently completed a research paper called Export-Learning and Foreign Direct Investment with Heterogeneous Firms.

In the paper, Professor Jakobsson studied how policy changes such as stronger patent protection and trade liberalisation affect innovation, technology transfer and consumer welfare.  She presents a dynamic general equilibrium model that shows how heterogeneous firms can innovate, learn how to export and eventually become multinational firms.

In this podcast, Professor Jakobsson shares the key findings of her research, and how companies can benefit from it.