International Vertical Integration: A Positive Model of Endogenous Structure
AbstractThis 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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Bibliographic InfoPaper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 199401.
Length: 29 pages
Date of creation: 1994
Date of revision:
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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