Working Paper: CEPR ID: DP6965
Authors: Pol Antràs; Esteban Rossi-Hansberg
Abstract: We survey an emerging literature at the intersection of organizational economics and international trade. We argue that a proper modelling of the organizational aspects of production provides valuable insights on the aggregate workings of the world economy. In reviewing the literature, we describe certain predictions of standard models that are affected or even overturned when organizational decisions are brought into the analysis. We also suggest potentially fruitful areas for future research.
Keywords: comparative advantage; contractual frictions; fragmentation; internalization; matching; offshoring; organizations; outsourcing; technology; wage inequality
JEL Codes: D23; E25; F10; F23; L23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Organizational decisions (D23) | Trade integration effects (F15) |
| Outsourcing of production processes (L23) | Relative factor rewards (D33) |
| Fragmentation of production across countries (F12) | Reduced-form production function (E23) |
| Reduced-form production function (E23) | Trade flows (F10) |
| Organizational structure of firms (L22) | Productivity (O49) |
| Organizational structure of firms (L22) | Wage inequality (J31) |