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On the Geography of Global Value Chains

Antr�s, Pol and Alonso de Gortari
Authors registered in the RePEc Author Service: Pol Antras

No 12063, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper develops a multi-stage general-equilibrium model of global value chains (GVCs) and studies the specialization of countries within GVCs in a world with barriers to international trade. With costly trade, the optimal location of production of a given stage in a GVC is not only a function of the marginal cost at which that stage can be produced in a given country, but is also shaped by the proximity of that location to the precedent and the subsequent desired locations of production. We show that, other things equal, it is optimal to locate relatively downstream stages of production in relatively central locations. We also develop and estimate a tractable, quantifiable version of our model that illustrates how changes in trade costs affect the extent to which various countries participate in domestic, regional or global value chains, and traces the real income consequences of these changes.

Keywords: Gains from trade; global value chains; sequential production; specialization; Trade Costs (search for similar items in EconPapers)
JEL-codes: C67 D21 D22 D58 F11 F14 F60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm and nep-int
Date: 2017-05
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Working Paper: On the Geography of Global Value Chains (2017) Downloads
Working Paper: On the Geography of Global Value Chains (2016) Downloads
Working Paper: On the Geography of Global Value Chains (2016) Downloads
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