Internationalization of services: The case of intra‐multinational enterprise trade

Abstract

Increased tradability of services, made possible by the information and communications technology (ICT) revolution, has been at the heart of the internationalization of services. Although rapid growth of the services trade between parents of multinational enterprises (MNEs) and their overseas subsidiaries has contributed to the internationalization of services, empirical studies examining the determinants of intra‐MNE trade in services are few. This article, using the ownership, location, and internalization (OLI) framework, attempts to explain intra‐MNE trade in services. The results provide strong support for the OLI perspective, and posit a complementary relationship between manufacturing foreign direct investment and intra‐MNE services trade. The results also suggest the importance of subsidiaries' absorptive capacity and breadth of global connectedness for intra‐MNE trade.

Corruption, foreign aid, and international trade

“…We used two dependent variables to evaluate the impact of corruption and foreign aid on OECD countries' international trade flows. The first dependent variable is Bilateral Exports , 1 which represents the total volume of exports in US dollars from an exporting country (OECD (i)) to an importing country (trading partner [j]) (de Jong & Bogmans, 2011; Kandogan, 2019; Rao & Vinod, 2019). The second dependent variable is Bilateral Imports , 2 which is the total volume of imports in US dollars to the importing country (OECD [ i ]) from the exporting country (trading partner [ j ]) (Batten & Bryant, 1999; Chakrabarty, Nag, Dasgupta, & Rastogi, 2016; Gouvea, Kapelianis, & Li, 2019; Narayan & Bui, 2019).…”