Global Sourcing of Heterogeneous Firms: Theory and Evidence

TY - ICOMM

T1 - Global Sourcing of Heterogeneous Firms: Theory and Evidence

AU - Kohler, Wilhelm

AU - Smolka, Marcel

PY - 2015/2/20

Y1 - 2015/2/20

N2 - The share of international trade within firm boundaries varies greatly across countries. This column presents new evidence on how the productivity of a firm affects the choice between vertical integration and outsourcing, as well as between foreign and domestic sourcing. The productivity effects found in Spanish firm-level data suggest that contractual imperfections distort the sourcing of inputs in the global economy, and that firm boundaries emerge in response to mitigate this distortion.

AB - The share of international trade within firm boundaries varies greatly across countries. This column presents new evidence on how the productivity of a firm affects the choice between vertical integration and outsourcing, as well as between foreign and domestic sourcing. The productivity effects found in Spanish firm-level data suggest that contractual imperfections distort the sourcing of inputs in the global economy, and that firm boundaries emerge in response to mitigate this distortion.

M3 - Net publication - Internet publication

ER -