Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration

Giuseppe Berlingieri, Claudia Steinwender and Frank Pisch

No 1570, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: We study whether and how the technological importance of an input – measured by its cost share – is related to the decision of whether to “make” or “buy” that input. Using detailed French international trade data and an instrumental variable approach based on self-constructed input-output tables, we show that French multi- nationals vertically integrate those inputs that have high cost shares. A stylized incomplete contracting model with both ex ante and ex post inefficiencies explains why: technologically more important inputs are “made” when transaction cost eco- nomics type forces (TCE; favoring integration) overpower property rights type forces (PRT; favoring outsourcing). Additional results related to the contracting environ- ment and headquarters intensity consistent with our theoretical framework show that both TCE and PRT type forces are needed to fully explain the empirical patterns in the data.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (4)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2021)
Working Paper: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2021)
Working Paper: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2020)
Working Paper: Organizing Global Supply Chains: Input-Output Linkages and Vertical Integration (2019)
Working Paper: Organizing global supply chains: input-output linkages and vertical integration (2018)
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:red:sed019:1570

Access Statistics for this paper

More papers in 2019 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().