The Changing Firm and Country Boundaries of US Manufacturers in Global Value Chains

Teresa Fort

No 31319, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper documents how US firms organize goods production across firm and country boundaries. Most US firms that perform physical transformation tasks in-house using foreign manufacturing plants in 2007 also own US manufacturing plants; moreover manufacturing comprises their main domestic activity. By contrast, “factoryless goods producers” outsource all physical transformation tasks to arm's-length contractors, focusing their in-house efforts on design and marketing. This distinct firm type is missing from standard analyses of manufacturing, growing in importance, and increasingly reliant on foreign suppliers. Physical transformation “within-the-firm” thus coincides with substantial physical transformation “within-the-country,” whereas its performance “outside-the-firm” often also implies “outside-the-country.” Despite these differences, factoryless goods producers and firms with foreign and domestic manufacturing plants both employ relatively high shares of US knowledge workers. These patterns call for new models and data to capture the potential for foreign production to support domestic innovation, which US firms leverage around the world.

JEL-codes: F1 L2 L6 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-int
Note: IO ITI PR
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Published as Teresa C. Fort, 2023. "The Changing Firm and Country Boundaries of US Manufacturers in Global Value Chains," Journal of Economic Perspectives, vol 37(3), pages 31-58.

Downloads: (external link)
http://www.nber.org/papers/w31319.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:31319

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31319

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().