Global production rationalization typically leads to a heavy volume of intercompany fund flows. By transferring only a netted amount of these payments, significant savings can be realized in the form of reduced foreign exchange spreads, float, and other transaction costs. However, if this netting is done by paper and pencil, opportunities to reduce transfer costs may be missed, especially where there is a complex pattern of cross-border transactions. The purpose of this paper is to show how mathematical programming can be used to design a netting system capable of minimizing the total costs involved in settling interaffiliate accounts.

This article summarizes the author's extensive investigation of the research and development investments made abroad by seven U.S.-based seven multinational organizations. The article describes the factors that affected the initial Investment in 55 R&D units established abroad by the Exxon corporation (its energy businesses); the Exxon Chemical Company; International Business Machines (IBM); the chemicals and Plastics Group of Union Carbide Corporation; CPC International; Otis Elevator Company; and the Corning Glass Works. The article also discusses the evolution of the same 55 R&D units established abroad by these seven multinationals.

In this article we develop a model that stresses the importance of a firm's activities and “pre-export” behavior for the export start. Of special importance in the model are factors such as information, characteristics of the decision-maker, the enterprise environment, and the extraregional expansion of the firm. The model is based both on more “traditional” research in international business and recent developments in location theory.