Trade Openness and Vertical Structure: Evidence From Korean Firm-Level Data

Hea-Jung Hyun and Jung Hur

Open Economies Review, 2014, vol. 25, issue 4, 720 pages

Abstract: Recent theories and empirics suggest that trade openness increases production fragmentation across countries. In this paper, we focus on the relationship between trade openness and firms’ choice of vertical structure. We find supportive, firm-level evidence that upon trade liberalization, firms restructure their organization by downsizing their domestic production processes (i.e. domestic vertical disintegration) and relocating their input production plants to other countries (i.e. cross-border vertical integration). Copyright Springer Science+Business Media New York 2014

Keywords: Trade openness; Vertical integration; Intra-firm trade; Foreign outsourcing; F23; L22 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Trade Openness and Vertical Structure:Evidence from Korean Firm-Level Data (2011)
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DOI: 10.1007/s11079-013-9291-7

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