Globalization and Vertical Structure: An Empirical Investigation

Stefan Buehler and Dirk Burghardt

No 1310, Economics Working Paper Series from University of St. Gallen, School of Economics and Political Science

Abstract: This paper studies the effect of trade facilitation on vertical firm structure using plant-level data from Switzerland. Based on the Business Census and the Input-Output table, we first calculate a binary measure of vertical integration for all plants registered in Switzerland. We then estimate the effect of a Mutual Recognition Agreement with the European Union on the plants' probability of being vertically integrated. Adopting a difference-in-differences approach, we find that this policy change reduced the treated plants' probability of being vertically integrated by about 10 percent. Our results are consistent with recent work in international trade theory.

Keywords: Vertical Integration; Hold-up Risk; Theory of the Firm; Globalization; Trade Barriers; Natural Experiment; Plant-Level Data (search for similar items in EconPapers)
JEL-codes: D23 F61 L22 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-03
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1310.pdf (application/pdf)

Related works:
Working Paper: Globalization and Vertical Structure: An Empirical Investigation (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:econwp:2013:10

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