Global sourcing – a critical reconsideration of sector definitions

Christian Schwarz ()
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Christian Schwarz: University of Duisburg-Essen

Economics Bulletin, 2011, vol. 31, issue 1, 708-713

Abstract: I introduce an alternative parameter-based definition of component- and headquarter-intensive sectors into the seminal model of global sourcing by Antràs and Helpman (2004, JPE). This approach overcomes problems of the original sector definition like counter intuitive classifications or industries that are not classified as either component- or headquarter-intensive. The strong empirical evidence for the model`s predictions is also based on a similar sector definition. With a numerical approach I show that a richer set of sourcing modes can arise in equilibrium. Nonetheless, the main results of Antràs and Helpman are robust.

Keywords: Multinational-firms; outsourcing; intra-firm trade; off-shoring; vertical FDI (search for similar items in EconPapers)
JEL-codes: D2 F1 (search for similar items in EconPapers)
Date: 2011-02-28
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