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The multi- national corporation cuts across national boundaries and makes a good deal of international trade into intra-firm trade. Financial capital is quite mobile within the corporation, as are senior managerial talent and the technical and managerial know-how which possibly provide the main rationale for the existence of the corporation. A model which assumes factor immobility between nations and which places primary importance upon national boundaries would seem to be utterly irrelevant. One could then argue that trade theory should be abandoned altogether, at least for the analysis of the activities of the multinational corporations. One should treat the world—perhaps the non-communist world—as a single market in which large corporations compete ...
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