 Globalization and the Evolution of the Supply Chain: who gains and who loses?Masahisa Fujita and Jacques Thisse No 571, KIER Working Papers from Kyoto University, Institute of Economic Research Abstract: This paper focuses on two distint 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 trigers the re-location of plants into the periphery. In particular, when the preocess 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; communication costs; agglomeration; headquarters; plants; supply chain; re-location (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:kyo:wpaper:571 Access Statistics for this paper More papers in KIER Working Papers from Kyoto University, Institute of Economic Research Contact information at EDIRC. |
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