Working Paper: NBER ID: w17470
Authors: Pol Antràs
Abstract: I survey the influence of Grossman and Hart's (1986) seminal paper in the field of International Trade. I discuss the implementation of the theory in open-economy environments and its implications for the international organization of production and the structure of international trade flows. I also review empirical work suggestive of the empirical relevance of the property-rights theory. Along the way, I develop novel theoretical results and also outline some of the key limitations of existing contributions.
Keywords: property rights; international trade; multinational firms; incomplete contracts
JEL Codes: D23; F10; F12; F14; F21; F23; L22; L23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| investments made by the parties involved (G31) | choice between integration and outsourcing (L24) |
| elasticity of revenue with respect to an agent's investment (E22) | integration tends to be favored (F15) |
| ownership structures (G32) | distribution of surplus (D39) |
| financial constraints (H60) | prevalence of integration (F15) |
| contract incompleteness (D86) | exacerbation of the hold-up problem (D86) |
| hold-up problem (D86) | impact on trade flows (F69) |