Globalization and the Evolution of the Supply Chain: who gains and who loses?

Masahisa Fujita and Jacques Thisse

No 5, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper focuses on two distinct facets of globalization: the decrease in the trade costs of goods and the decline of communication costs between headquarters and production facilities within firms.When the unskilled have about the same wage in the two regions, the decrease of these costs fosters the gradual agglomeration of plants in the core region accommodating the headquarters. By contrast, when the wage gap is significant, the process of integration eventually triggers the re-location of plants into the periphery. In particular, when the process of re-location is driven by falling communication costs, the welfare of all workers living in the core goes down whereas the welfare of those who reside in the periphery rises.

Keywords: Information technologies (technology); Communication costs; Agglomeration; Headquarters; Plants; Supply chain; Re-location; Globalization; International economic relations; Communication; 情報技術; グローバリゼーション; 国際経済; コミュニケーション (search for similar items in EconPapers)
JEL-codes: F12 L13 R13 (search for similar items in EconPapers)
Date: 2004-08-01
New Economics Papers: this item is included in nep-ure
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 5. 2004-08-01

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https://ir.ide.go.jp/record/38160/files/IDP000005_001.pdf First version, 2004 (application/pdf)

Related works:
Journal Article: GLOBALIZATION AND THE EVOLUTION OF THE SUPPLY CHAIN: WHO GAINS AND WHO LOSES? (2006)
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 ? (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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