Managerial Incentives and the International Organization of Production

Elhanan Helpman and Gene Grossman

No 9403, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a model in which the heterogeneous firms in an industry choose their modes of organization and the location of their subsidiaries or suppliers. We assume that the principals of a firm are constrained in the nature of the contracts they can write with suppliers or employees. Our main result concerns the sorting of firms with different productivity levels into different organizational forms. We use the model to examine the implications of falling trade costs for the relevant prevalence of outsourcing and foreign direct investment.

JEL-codes: F23 L22 (search for similar items in EconPapers)
Date: 2002-12
Note: ITI PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as Grossman, Gene M. & Helpman, Elhanan, 2004. "Managerial incentives and the international organization of production," Journal of International Economics, Elsevier, vol. 63(2), pages 237-262, July.

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Journal Article: Managerial incentives and the international organization of production (2004)
Working Paper: Managerial Incentives and the International Organization of Production (2003)
Working Paper: Managerial Incentives and the International Organization of Production (2002)
Working Paper: Managerial Incentives and the International Organization of Production (2002)
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