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Trade Openness and Vertical Structure:Evidence from Korean Firm-Level Data

Jung Hur () and Hea-Jung Hyun

No 1106, Working Papers from Research Institute for Market Economy, Sogang University

Abstract: Recent theories and empirics suggest that trade openness increases world trade through production fragmentation across countries. In this paper we focus on the relationship between trade openness and firms¡¯ choices of vertical structure. We find firm-level data evidence that upon trade liberalization firms have been restructuring their organization by downsizing their domestic production processes (i.e. domestic vertical disintegration), and relocating their input production plants to other countries (i.e. cross-border vertical integration).

Keywords: Trade Openness; Vertical Integration; Intra-Firm Trade; Foreign Outsourcing (search for similar items in EconPapers)
JEL-codes: F23 L22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2011-09
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Journal Article: Trade Openness and Vertical Structure: Evidence From Korean Firm-Level Data (2014) Downloads
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