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Global sourcing and firm selection

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  • Kohler, Wilhelm
  • Smolka, Marcel

Abstract

We analyze the sourcing strategies of firms active in the Spanish manufacturing sector. We show that firms that select strategies of vertical integration and of foreign sourcing ex post tend to have been more productive, ex ante, than other firms.

Suggested Citation

  • Kohler, Wilhelm & Smolka, Marcel, 2014. "Global sourcing and firm selection," Economics Letters, Elsevier, vol. 124(3), pages 411-415.
  • Handle: RePEc:eee:ecolet:v:124:y:2014:i:3:p:411-415
    DOI: 10.1016/j.econlet.2014.06.031
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    References listed on IDEAS

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    1. Elhanan Helpman, 2006. "Trade, FDI, and the Organization of Firms," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 589-630, September.
    2. Joachim Wagner, 2011. "Offshoring and firm performance: self-selection, effects on performance, or both?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 217-247, June.
    3. Wilhelm K. Kohler & Marcel Smolka, 2012. "Global Sourcing: Evidence from Spanish Firm-Level Data," World Scientific Book Chapters,in: Quantitative Analysis Of Newly Evolving Patterns Of International Trade Fragmentation, Offshoring of Activities, and Vertical Intra-Industry Trade, chapter 4, pages 139-193 World Scientific Publishing Co. Pte. Ltd..
    4. Stephen Ross Yeaple, 2006. "Offshoring, Foreign Direct Investment, and the Structure of U.S. Trade," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 602-611, 04-05.
    5. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
    6. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    7. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    8. Grossman, Gene M. & Helpman, Elhanan, 2004. "Managerial incentives and the international organization of production," Journal of International Economics, Elsevier, vol. 63(2), pages 237-262, July.
    9. Gregory Corcos & Delphine M. Irac & Giordano Mion & Thierry Verdier, 2013. "The Determinants of Intrafirm Trade: Evidence from French Firms," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 825-838, July.
    10. Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, vol. 72(1), pages 113-127, May.
    11. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    12. Stefano Federico, 2010. "Outsourcing versus integration at home or abroad and firm heterogeneity," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(1), pages 47-63, February.
    13. Kohler Wilhelm K & Smolka Marcel, 2011. "Sourcing Premia with Incomplete Contracts: Theory and Evidence," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-39, February.
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    15. Defever, Fabrice & Toubal, Farid, 2013. "Productivity, relationship-specific inputs and the sourcing modes of multinationals," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 345-357.
    16. repec:hrv:faseco:33077829 is not listed on IDEAS
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    18. Kohler, Wilhelm & Smolka, Marcel, 2013. "Global Sourcing: Towards an Empirical Test of the Hold-up Model," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80049, Verein für Socialpolitik / German Economic Association.
    19. Pol Antras & Elhanan Helpman, 2004. "Global Sourcing," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 552-580, June.
    20. Stefano Federico, 2012. "Headquarter intensity and the choice between outsourcing versus integration at home or abroad," Industrial and Corporate Change, Oxford University Press, vol. 21(6), pages 1337-1358, December.
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    Citations

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    Cited by:

    1. Hartmut Egger & Udo Kreickemeier & Jens Wrona, 2017. "Offshoring Domestic Jobs," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 2, pages 27-70 World Scientific Publishing Co. Pte. Ltd..
    2. Smolka, Marcel & Kohler, Wilhelm, 2015. "Global Sourcing of Heterogeneous Firms: Theory and Evidence," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113012, Verein für Socialpolitik / German Economic Association.
    3. repec:eee:iburev:v:27:y:2018:i:2:p:339-354 is not listed on IDEAS
    4. repec:kap:iecepo:v:14:y:2017:i:2:d:10.1007_s10368-016-0371-1 is not listed on IDEAS
    5. Verena Nowak & Christian Schwarz & Jens Suedekum, 2016. "Asymmetric spiders: Supplier heterogeneity and the organization of firms," Canadian Journal of Economics, Canadian Economics Association, vol. 49(2), pages 663-684, May.
    6. Tobias Brändle, 2015. "Is offshoring linked to offshoring potential? Evidence from German linked employer–employee data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(4), pages 735-766, November.
    7. Michael Koch & Marcel Smolka, 2017. "Foreign Ownership and Skill-biased Technological Change," Economics Working Papers 2017-04, Department of Economics and Business Economics, Aarhus University.
    8. repec:eee:reveco:v:53:y:2018:i:c:p:160-167 is not listed on IDEAS
    9. Peter S. Eppinger & Nicole Meythaler & Marc-Manuel Sindlinger & Marcel Smolka, 2015. "The Great Trade Collapse and the Spanish Export Miracle: Firm-level Evidence from the Crisis," Economics Working Papers 2015-10, Department of Economics and Business Economics, Aarhus University.
    10. Peter S. Eppinger, 2014. "Exploiting the Potential for Services Offshoring: Evidence from German Firms," IAW Discussion Papers 109, Institut für Angewandte Wirtschaftsforschung (IAW).
    11. Koch, Michael & Smolka, Marcel, 2017. "Foreign Ownership and Skill-biased Technological Change," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168202, Verein für Socialpolitik / German Economic Association.
    12. Eppinger, Peter S. & Kukharskyy, Bohdan, 2017. "Contracting institutions and firm boundaries," University of Tuebingen Working Papers in Economics and Finance 100, University of Tuebingen, Faculty of Economics and Social Sciences.

    More about this item

    Keywords

    Vertical integration; Offshoring; Firm selection; Firm productivity;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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