Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration

Giuseppe Berlingieri, Claudia Steinwender and Frank Pisch

No 1570, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: We study whether and how the technological importance of an input – measured by its cost share – is related to the decision of whether 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 French multi- nationals vertically integrate those inputs that have high cost shares. A stylized incomplete contracting model with both ex ante and ex post inefficiencies explains why: technologically more important inputs are “made” when transaction cost eco- nomics type forces (TCE; favoring integration) overpower property rights type forces (PRT; favoring outsourcing). Additional results related to the contracting environ- ment and headquarters intensity consistent with our theoretical framework show that both TCE and PRT type forces are needed to fully explain the empirical patterns in the data.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (4)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2021)
Working Paper: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2021)
Working Paper: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2020)
Working Paper: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2019)
Working Paper: Organizing global supply chains: input-output linkages and vertical integration (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:1570

Access Statistics for this paper

More papers in 2019 Meeting Papers from Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().