Multinational corporations and regional revenue retention in a vertically integrated industry: Bauxite/aluminium in the Caribbean

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Abstract
Auty R. M. (1983) Multinational corporations and regional revenue retention in a vertically integrated industry: bauxite/aluminium in the Caribbean, Reg. Studies 17, 3–17. Comparison of revenue retention for differing vertically-integrated bauxite/aluminium chains reveals high revenue leakage to be characteristic of each of the four production stages. Aluminium's capital-intensive production function and the geographical fragmentation of the production chain, arising from the different locational requirements of each processing stage, are prime causes of low regional revenue retention, rather than multinational ownership, transfer pricing or discrimination against LDC investment. Maximization of bauxite's regional economic stimulus requires the proximity of ore, cheap power and large markets together with a vertical production chain characterized by heavily depreciated plant.