[6] Markusen began his academic career in 1972 by joining the University of Western Ontario as a professor of economics and served until 1990.
His early research investigated how multinational firms can strategically manage their valuable knowledge capital when expanding abroad, considering options like exporting, licensing, and subsidiary acquisition, while analyzing the factors influencing these choices and their impact on international specialization patterns.
[11] More recently in 2014, his study proposed an alternative approach to international trade analysis by examining the relationship between the characteristics of goods and services in production and consumer preferences and established a strong correlation between skilled-labor intensity and income elasticity.
Beginning with a 1984 article, Markusen changed the focus of multinational-firm research from a macroeconomic capital market orientation to one emphasizing location and production, thereby integrating multinationals with microeconomic trade theory.
[18] Focusing on the role of multinational firms in international economics, Markusen's book titled Multinational Firms and the Theory of International Trade provided insights into the interplay among scale economies, expenses related to trade, factor endowments, and instances of imperfect competition.
[20] Furthermore, his work highlighted the limitations of existing research in the field of multinational enterprises and emphasized the need for more formal and comprehensive theoretical frameworks that can effectively link assumptions with conclusions.
[13] Later in 1995, he presented a model that challenged some prevailing assumptions from the 'new trade theory' and offered an alternative perspective on the dynamics of international economic relationships.
[28] His 2001 study with Mattias Ganslandt introduced modeling approaches for representing international trade standards and technical regulations and advocated for their incorporation into an applied general-equilibrium framework using authentic data.
[29] Focusing his research efforts on modeling the offshoring of white-collar services, his work proposed using existing trade theory as a foundation, while adapting and combining relevant concepts into simple models, to analyze the offshoring of white-collar services and its effects in response to technological and institutional changes.
[32][33] In his analysis of domestic-content rules in regional trade agreements, his study suggested that domestic-content rules in regional trade agreements, especially in industries with foreign multinationals heavily reliant on imported inputs, can lead to anti-competitive effects, potentially decreasing industry output and shifting economic rents to domestic firms.