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We survey an emerging literature at the intersection of organizational economics and international trade. We argue that a proper modelling of the organizational aspects of production provides valuable insights on the aggregate workings of the world economy. In reviewing the literature, we...
Persistent link: https://www.econbiz.de/10005791747
I survey the influence of Grossman and Hart's (1986) seminal paper in the field of International Trade. I discuss the implementation of the theory in open-economy environments and its implications for the international organization of production and the structure of international trade flows. I...
Persistent link: https://www.econbiz.de/10009320400
reduce the relative prevalence of FDI or foreign outsourcing. The impact on the composition of offshoring depends on whether … of these organizational forms. Better contracting institutions in the South raise the prevalence of offshoring, but may …
Persistent link: https://www.econbiz.de/10005792310
has to overcome. If production abroad involves a fixed cost, offshoring one intermediate unambiguously facilitates … offshoring of other intermediates. However, if production abroad involves incomplete contracts, offshoring one intermediate …
Persistent link: https://www.econbiz.de/10009324256
The effects of the quality of institutions on economic development and comparative advantage have been so far investigated separately. This paper proposes a theoretical framework in which trade patterns and growth rates are jointly determined by international differences in contract enforcement...
Persistent link: https://www.econbiz.de/10005498068
We develop a simple model to study the interactions between a supplier’s financial constraints and contract incompleteness in a vertical relationship. Production complexity increases the extent of contract incompleteness and the hold-up problem, which generates a cost when the supplier needs...
Persistent link: https://www.econbiz.de/10008530345
This paper documents the extent and characteristics of plants and firms in the US that are outside the manufacturing sector according to official government statistics but nonetheless are heavily involved in activities related to the production of manufactured goods. Using new data on...
Persistent link: https://www.econbiz.de/10011083862
The recent media and political attention on service outsourcing from developed to developing countries gives the … impression that outsourcing is exploding. As a result, workers in industrial countries are anxious about job losses. This Paper … aims to establish what are the hypes and what are the facts. The results show that although service outsourcing has been …
Persistent link: https://www.econbiz.de/10005504627
There exist two approaches in the literature concerning the multinational firm's mode choice for foreign production between an owned subsidiary and a licensing contract. One approach considers environments where the firm is transferring primarily knowledge-based assets. An important assumption...
Persistent link: https://www.econbiz.de/10005504703
The seminal work by Grossman and Hart (1986) made the study of firm boundaries susceptible to formal economic analysis, and illuminated an important role for markets in providing incentives. In this essay, I discuss some new directions that the literature has taken since. As a central challenge,...
Persistent link: https://www.econbiz.de/10011083406