firms that are consistent with stylized facts from the recent empirical literature. -- multinational firms ; outsourcing … ; intra-firm trade ; offshoring ; vertical FDI …

multiple complementary inputs and the entry of a supplier into the final good market gives rise to mutual outsourcing of inputs … between the encroaching supplier and the incumbent. We show that, post encroachment, mutual outsourcing between the competing … mutual outsourcing. Our analysis yields novel managerial, empirical and policy implications. …