MNCs Intra-firm Trade And International Competitive Advantage

Over one third of world trade consists of intra-firm trade, and about 80% payment of the technology-transferring fee is completed by intra-firm. The large-scale intra-firm trade of MNCs, in its special way, has great influence over the host countries, the investing countries, even the global economy. MNCs' intra-firm trade is the reasonable result of pursuing international competitive advantage. Intra-firm trade is the effective measure to enhance the MNCs' international competitive advantage. The text contains five chapters:The first chapter is about the status and theories of intra-firm trade. It focuses on introducing the current status and several theories of intra-firm trade.Chapter two is focuses its intention on interpreting how intra-firm trade takes place by analyzing value chains of enterprises and how to bring intra-firm trade when MNCs pursue international competitive advantage. By analyzing the enterprise value chains, we can say that the division, transferring, and conformity of MNCs' value chains create intra-firm trade in pursuing international competitive advantage. In order to pursue international competitive advantage, it is the basic reason of the creation intra-firm trade that MNCs recompose their value chains.Chapter three is about intra-firm trade in MNCs' technology. The status of intra-firm technology trade is introduced. The author makes a general analysis of the relationship between intra-firm technology transfer and international competitive advantage. All the characteristics of technology come to a tendency that technology is transferred within MNCs. The technique intra-firm transfer can quickly create the inner market, discriminative price system in technology transfer and trading in goods, and can lower the transaction cost, and can strengthen the technology monopoly position in the world, and can create or maintain the difference advantage. All of these can enhance the MNCs' international competitive advantage.Chapter four focuses on location choice. The author has analyzed that intra-firm trade is the effective measure to transfer host countries' comparative advantage to MNCs'international competitive advantage. The precondition of intra-firm trade in MNCs is the direct investment to some host country. It is the basic motive of FDI to make use of the comparative advantage in host country adequately. The intra-firm trade is the basic means to expand the international competitive advantage by combining the host country comparative advantage with the MNCs' advantage.Chapter five is about the suggestions on how to attract MNCs' FDI and how to promote foreign direct investors in our country.