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International Vertical Integration: A Positive Model of Endogenous Structure

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  • Denise Eby Konan

    ()
    (Department of Economics, University of Hawaii at Manoa)

Abstract

This paper provides a simple theoretical model in which a vertically-distorted industry structure is considered in an international setting. Fixed costs, existing in both the final good and intermediate good sectors, result in a bilateral externality. Production as well as equity ownership potentially crosses national boundaries. Differing parameter specifications give rise to various market structures as industrial organization is endogenous to the model. As a result, marginal changes in parameter specifications may lead to jumps in plant ownership and location decisions.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/88-98/WP_94-1.pdf
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 199401.

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Length: 29 pages
Date of creation: 1994
Date of revision:
Handle: RePEc:hai:wpaper:199401

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