Organizing Global Supply Chains: Input Cost Shares and Vertical Integration / Giuseppe Berlingieri, Frank Pisch, Claudia Steinwender.

Format:

Book

Author/Creator:

Berlingieri, Giuseppe.

Contributor:

National Bureau of Economic Research.

Pisch, Frank.

Steinwender, Claudia.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25286.

NBER working paper series no. w25286

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Organizing Global Supply Chains

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

We study how the technological importance of inputs - measured by cost shares - is related to the decision to "make" or "buy" that input. Using detailed French international trade data and an instrumental variable approach based on self-constructed input-output tables, we show that multinationals vertically integrate high cost share inputs. A stylized incomplete contracting model with both ex-ante and ex-post inefficiencies explains why: technologically more important inputs are "made" when transaction cost economics type forces overpower property rights type forces. However, additional results show that both types forces are needed to explain the full patterns in the data.

Notes:

Print version record

November 2018.