IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/5886.html
   My bibliography  Save this paper

Business Groups and Trade in East Asia: Part 1, Networked Equilibria

Author

Listed:
  • Robert C. Feenstra
  • Deng-Shing Huang
  • Gary G. Hamilton

Abstract

We propose an economic model of business groups that allows for the cooperative behavior of groups of firms, where the number and size of each group is determined endogenously. In this framework, more than one configuration of groups can arise in equilibrium: several different types of business groups can occur, each of which is consistent with profit-maximization and is stable. This means that the economic logic does not fully determine the industrial structure, leaving scope for political and sociological factors to have a lasting influence. In a companion paper, we argue that the differing structures of business groups found in South Korea, Taiwan and Japan fit the stylized results from the model, and contrast the impact of these groups on the product variety of their country exports to the United States.

Suggested Citation

  • Robert C. Feenstra & Deng-Shing Huang & Gary G. Hamilton, 1997. "Business Groups and Trade in East Asia: Part 1, Networked Equilibria," NBER Working Papers 5886, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5886
    Note: ITI
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w5886.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
    2. Ariel Pakes & Paul McGuire, 1994. "Computing Markov-Perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated Product Model," RAND Journal of Economics, The RAND Corporation, vol. 25(4), pages 555-589, Winter.
    3. Feenstra, R.C. & Yang, T.H. & Hamilton, G.G., 1993. "Market Structure and International Trade: Business Groups in East Asia," Papers 93-23, California Davis - Institute of Governmental Affairs.
    4. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-950, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
    2. Feenstra, Robert C. & Yang, Tzu-Han & Hamilton, Gary G., 1999. "Business groups and product variety in trade: evidence from South Korea, Taiwan and Japan," Journal of International Economics, Elsevier, vol. 48(1), pages 71-100, June.
    3. John McLaren, 2000. ""Globalization" and Vertical Structure," American Economic Review, American Economic Association, vol. 90(5), pages 1239-1254, December.
    4. Feenstra, Robert C. & Madani, Dorsati & Yang, Tzu-Han & Liang, Chi-Yuan, 1999. "Testing endogenous growth in South Korea and Taiwan," Journal of Development Economics, Elsevier, vol. 60(2), pages 317-341, December.
    5. Spencer, Barbara J & Qiu, Larry D, 2001. "Keiretsu and Relationship-Specific Investment: A Barrier to Trade?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 871-901, November.
    6. de Groot, H.L.F., 1998. "Macroeconomic Consequences of Outsourcing. An Analysis of Growth, Welfare and Product Variety," Other publications TiSEM fcbc1070-85e4-4b77-b138-0, Tilburg University, School of Economics and Management.
    7. Tito Boeri & Joaquim Oliveira-Martins, 2002. "Transition, variété des produits et intégration économique," Economie & Prévision, La Documentation Française, vol. 0(1), pages 55-69.
    8. Tito Boeri & Joaquim Oliveira Martins, 2002. "Varieties, Jobs and EU Enlargement," Rivista di Politica Economica, SIPI Spa, vol. 92(1), pages 139-178, January-F.
    9. Krug, B., 2003. "Networks In Cultural, Economic and Evolutionary Perspective," ERIM Report Series Research in Management ERS-2003-050-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feenstra, Robert C. & Yang, Tzu-Han & Hamilton, Gary G., 1999. "Business groups and product variety in trade: evidence from South Korea, Taiwan and Japan," Journal of International Economics, Elsevier, vol. 48(1), pages 71-100, June.
    2. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
    3. Heineck, Guido & Süssmuth, Bernd, 2013. "A different look at Lenin’s legacy: Social capital and risk taking in the Two Germanies," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 789-803.
    4. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
    5. Agnès Bénassy‐Quéré & Lionel Fontagné & Horst Raff, 2011. "Exchange‐rate Misalignments in Duopoly: The Case of Airbus and Boeing," The World Economy, Wiley Blackwell, vol. 34(4), pages 623-641, April.
    6. Geoffrey Barrows & Hélène Ollivier & Ariell Reshef, 2023. "Production Function Estimation with Multi-Destination Firms," CESifo Working Paper Series 10716, CESifo.
    7. Patrick Legros & Andrew F. Newman & Eugenio Proto, 2014. "Smithian Growth through Creative Organization," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 796-811, December.
    8. Stephen J. Redding & David E. Weinstein, 2017. "Aggregating from Micro to Macro Patterns of Trade," NBER Working Papers 24051, National Bureau of Economic Research, Inc.
    9. Robert Z. Lawrence & Lawrence Edward, 2010. "Do Developed and Developing Countries Compete Head to Head in High Tech?," Working Paper Series WP10-8, Peterson Institute for International Economics.
    10. Roberto Foa & Anna Nemirovskaya & Elena Mostovova, 2013. "Internal Empires I: Social Institutions of the Frontier," HSE Working papers WP BRP 09/SOC/2013, National Research University Higher School of Economics.
    11. Njike, Arnold, 2020. "Trade in value-added and the welfare gains of international fragmentation," MPRA Paper 100427, University Library of Munich, Germany.
    12. David O. Argente & Chang-Tai Hsieh & Munseob Lee, 2020. "Measuring the Cost of Living in Mexico and the US," NBER Working Papers 27806, National Bureau of Economic Research, Inc.
    13. Konstantin Yanovsky & Ilia Zatcovetzky & Sergei Zhavoronkov & Ekaterina Reva, 2013. "Modern Anti-Capitalistic Ideologies," Working Papers 0059, Gaidar Institute for Economic Policy, revised 2013.
    14. Richard Lowery & Tim Landvoigt, 2016. "Financial Industry Dynamics," 2016 Meeting Papers 1248, Society for Economic Dynamics.
    15. Diewert, W. Erwin & Fox, Kevin J., 2017. "Substitution Bias in Multilateral Methods for CPI Construction using Scanner Data," Microeconomics.ca working papers erwin_diewert-2017-3, Vancouver School of Economics, revised 23 Mar 2017.
    16. Andrea Asoni, 2008. "Protection Of Property Rights And Growth As Political Equilibria," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 953-987, December.
    17. Giuntella, Osea & Rieger, Matthias & Rotunno, Lorenzo, 2020. "Weight gains from trade in foods: Evidence from Mexico," Journal of International Economics, Elsevier, vol. 122(C).
    18. Galinato, Gregmar I. & Chouinard, Hayley H., 2018. "Strategic interaction and institutional quality determinants of environmental regulations," Resource and Energy Economics, Elsevier, vol. 53(C), pages 114-132.
    19. Mika Kallioinen, 2017. "Inter‐communal institutions in medieval trade," Economic History Review, Economic History Society, vol. 70(4), pages 1131-1152, November.
    20. William R Kerr, 2018. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns," The World Bank Economic Review, World Bank, vol. 32(1), pages 163-182.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5886. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.