A Framework for Fragmentation

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A Framework for Fragmentation

Author Info

Ronald W. Jones () (University of Rochester)

Abstract

The word fragmentation refers to a splitting up of a vertically integrated production process such that the separate fragments can be traded on markets. This paper is concerned with international fragmentation, generally allowing gains from a finer division of labor based on comparative advantage in separate fragments. A discussion of how growth in output can encourage fragmentation because of the increasing returns nature of the service links required to coordinate separate production blocks, and how drastic reductions in the costs of these service links also encourages fragmentation is followed by a focus on internal income distribution. It is shown that a country that loses a labor-intensive fragment of a process to international competition following a reduction in costs of service links may find its real wage rising. This is especially possible in more capital-abundant countries.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-056/2.

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Date of creation: 24 Jul 2000
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Handle: RePEc:dgr:uvatin:20000056

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This paper has been announced in the following NEP Reports:

NEP-ALL-2000-09-18 (All new papers)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Other versions:
- Arndt, Sven W., 1997. "Globalization and the open economy," The North American Journal of Economics and Finance, Elsevier, vol. 8(1), pages 71-79. [Downloadable!] (restricted)
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Deardorff, A.V., 1998. "Fragmentation in Simple Trade Models," Papers 98-11, Michigan - Center for Research on Economic & Social Theory.
Other versions:
- Deardorff, A.V., 1998. "Fragmentation in Simple Trade Models," Working Papers 422, Research Seminar in International Economics, University of Michigan.
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Other versions:
- Gordon H. Hanson, 1994. "Localization Economies, Vertical Organization and Trade," NBER Working Papers 4744, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Jones, Ronald W & Engerman, Stanley L, 1996. "Trade, Technology, and Wages: A Tale of Two Countries," American Economic Review, American Economic Association, vol. 86(2), pages 35-40, May. [Downloadable!] (restricted)
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Jones, R.W. & Marjit, S., 1992. "International Trade and Endogenous Production Structures," RCER Working Papers 312, University of Rochester - Center for Economic Research (RCER).
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Roberta Rabellotti & Alessia Amighini, 2003. "The effect of globalisation on industrial districts in Italy: evidence from the footwear sector," ERSA conference papers ersa03p500, European Regional Science Association. [Downloadable!]
Richard Baldwin & Frederic Robert-Nicoud, 2007. "Offshoring: General Equilibrium Effects on Wages, Production and Trade," NBER Working Papers 12991, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Baldwin, Richard & Robert-Nicoud, Frédéric, 2007. "Offshoring: General Equilibrium Effects on Wages, Production and Trade," CEPR Discussion Papers 6218, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Offshoring: General Equilibrium Effects on Wages, Production and Trade," CEP Discussion Papers dp0794, Centre for Economic Performance, LSE. [Downloadable!]
- Richard Baldwin & Frédéric Robert-Nicoud, 2008. "Offshoring: General Equilibrium Effects on Wages, Production and Trade," Development Working Papers 250, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
Ilaria Mariotti & Giacinto Micucci & Pasqualino Montanaro, 2004. "Internationalisation strategies of Italian district SMEs: an analysis on firm-level data," ERSA conference papers ersa04p436, European Regional Science Association. [Downloadable!]
Alessia Amighini & Roberta Rabellotti, 2003. "the effects of globalization on italian industrial districts: evidence from the footwear sector," Working Papers 64, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont. [Downloadable!]

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