Recent efforts by international trade economics have led to the integration of the theory of the multinational enterprise into the theory of international trade. This is both an exciting and an important development. Prior to the last decade or so, analysis of the MNE was largely distinct from...

This paper contributes to research endogenizing multinational firms in general-equilibrium trade models. We attempt to integrate separate contributions on horizontal multinationals which produce the same final product in multiple locations, with work on vertical multinationals, which...