This paper investigates the role of productivity on a firm's organizational choice. We expand Antràs and Helpman (2004) by allowing heterogeneous firms to choose between adopting specific and generic inputs. In input-intensive industries, firms face a trade-off between the lower productivity of...

In recent decades, complex manufacturing sectors such as electronics have transformed from an industry dominated by vertically integrated firms that source locally to an industry dominated by horizontally specialized firms that source globally. To account for this, we build an two-country...