Managerial Incentives and the International Organization of Production

Elhanan Helpman and Gene Grossman ()

No 9403, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a model in which the heterogeneous firms in an industry choose their modes of organization and the location of their subsidiaries or suppliers. We assume that the principals of a firm are constrained in the nature of the contracts they can write with suppliers or employees. Our main result concerns the sorting of firms with different productivity levels into different organizational forms. We use the model to examine the implications of falling trade costs for the relevant prevalence of outsourcing and foreign direct investment.

JEL-codes: L22 F23 (search for similar items in EconPapers)
Date: 2002-12
Note: ITI PR
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Related works:
Working Paper: Managerial Incentives and the International Organization of Production (2003)
Working Paper: Managerial Incentives and the International Organization of Production (2002)
Working Paper: Managerial Incentives and the International Organization of Production (2002)
Journal Article: Managerial incentives and the international organization of production (2004)
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