those suppliers it does affect, the rule increases investment, but it also induces excessive sourcing (for given investment …

We study how a preferential trade agreement (PTA) affects international sourcing decisions, aggregate productivity and … welfare under incomplete contracting and endogenous matching. Contract incompleteness implies underinvestment. That … from the investment. This raises aggregate productivity. On the other hand, the agreement yields sourcing diversion. More …

We study how a preferential trade agreement (PTA) affects international sourcing decisions, aggregate productivity and … welfare under incomplete contracting and endogenous matching. Contract incompleteness implies underinvestment. That … from the investment. This raises aggregate productivity. On the other hand, the agreement yields sourcing diversion. More …

sourcing, incomplete contracts and endogenous matching. We uncover several new channels through which PTAs affect global … regionalism literatureand arises because PTAs affect the severity of hold-up problems in sourcing relationships. Wecharacterize … the classical Vinerian approach, but takedifferent forms under global sourcing. The third is entirely new in the …

those suppliers it does affect, the rule increases investment, but it also induces excessive sourcing (for given investment …