ABSTRACT
This chapter aims to investigate the importance of multinational subsidiaries in the foreign market as a special form of delivery system or foreign presence. It examines the possibility that no single model of international trade will satisfactorily explain which goods and services a country exports or imports. Due largely to the work of Alan Deardorff, the expression "comparative advantage" has become linked to the factor-proportions model of international trade. The principle of comparative advantage states that firms will export those goods in which they and their country are relatively (cost-) efficient and makes no contribution to the problem of the determinants of that relative efficiency. The theory of international trade has a dominant model which is a variant on the Heckscher-Ohlin-Samuelson or HeckscherOhlin-Vanek theorems and which rests squarely upon identification of generic factors of production and the relationship between supply proportions and autarkic factor prices.
