International investment and the operations of multinational companies are phenomena which - because of their growing importance in the world economy - have attracted considerable interest in the last decade or so.
This book gives careful theoretical and empirical treatment of same of the issues that lie at the heart of the public policy debate and that have been central themes in the economic literature. The focus is on 1) what determines international production by national firms, and 2) what the effect is on home country trade and employment of allowing foreign production.
The empirical analysis uses unique census data on Swedish manufacturing firms and their foreign affiliates. This makes it the first study in which hypotheses regarding the determinants of international production have been tested on data for the outward investment of a country other than the U.S. Since hypotheses have been developed mainly on the basis of the U.S. experience, comparative study should be an important step toward finding a "general" theory of foreign investment.