GLOBALIZATION AND THE EVOLUTION OF THE SUPPLY CHAIN: WHO GAINS AND WHO LOSES?

Masahisa Fujita and Jacques Thisse

International Economic Review, 2006, vol. 47, issue 3, 811-836

Abstract: This article focuses on two distinct facets of globalization: decrease in the trade costs of goods and the decline of communication costs between headquarters and production facilities. When the unskilled have about the same wage in two regions, decrease of these costs fosters the agglomeration of plants in the core accommodating headquarters. When the wage gap is significant, process of integration eventually triggers the relocation of plants into the periphery. When this process of relocation is driven by falling communication costs, the welfare of all workers in the core falls whereas that in the periphery rises. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Date: 2006
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Working Paper: Globalisation and the evolution of the supply chain: who gains and who loses? (2006)
Working Paper: Globalization and the evoluton of the supply chain: WHO gains and who loses? (2006)
Working Paper: Globalization and the Evolution of the Supply Chain: who gains and who loses? (2004)
Working Paper: Globalization and the evolution of the supply chain: who gains and who loses ? (2003)
Working Paper: Globalization and the Evolution of the Supply Chain: Who Gains and Who Loses? (2003)
Working Paper: Globalization and the Evolution of the Supply Chain: who gains and who loses? (2003)
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