We investigate the link between productivity of firms and their sourcing behavior. Following Antràs and Helpman (2004) we distinguish between domestic and foreign sourcing, as well as between outsourcing and vertical integration. A firm's choice is driven by a hold-up problem caused by lack of enforceable contracts. We use Spanish firm-level data to examine the productivity premia associated with the different sourcing strategies.
Quantitative Analysis of Newly Evolving Patterns of International Trade: Fragmentation, Offshoring of Activities, and Vertical Intra-industry Trade, 2012, p. 139-189
Main Research Area:
World Scientific Studies in International Economics