HU Songhua
Author information
Lingnan College, Sun Yat-sen University, Guangzhou 510275, China
Departing from the traditional profit-maximization assumption underlying the theory of the multinational enterprises (MNEs), this paper proposes a model of the revenue-maximizing MNE subject to the profit constraint. The nonlinear programming techniques are used for the equilibrium analysis of the MNE’s decision-making. A set of optimal conditions is derived regarding the quantity of output, volume of intra-firm trade, allocation of multinational production, as well as transfer prices in both exogenous and endogenous cases. Under the context, a comparison of the behavioral differences is made between the revenue-maximizing MNE and the profit-maximizing MNE.
multinational enterprise, revenue maximization, behavioral model, constrained sales-maximization
HU Songhua. An equilibrium analysis of the revenuemaximizing multinational enterprise. Front. Econ. China, 2008, 3(3): 482‒495 https://doi.org/10.1007/s11459-008-0023-7
