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International Trade and Local Organization of Production - Two Elementary Propositions

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  • Sugata Marjit

Abstract

This paper argues that international trade should affect local organization of production in a systematic way. By using the standard Heckscher-Ohlin-Samuelson model we show that the export sector is more likely to demonstrate fragmentation, entrepreneurship and outsourcing compared to the import-competing sector in a typical labor abundant country. Liberal trade regime will promote entrepreneurship in general. This is the first elementary proposition. Local outsourcing also establishes a clear link between trade and productivity. This is the second elementary proposition.

Suggested Citation

  • Sugata Marjit, 2009. "International Trade and Local Organization of Production - Two Elementary Propositions," Discussion Papers 09/16, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:09/16
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    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2009/09-16.pdf
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    References listed on IDEAS

    as
    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. Pol Antras & Elhanan Helpman, 2004. "Global Sourcing," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 552-580, June.
    3. Alan V. Deardorff, 2011. "Fragmentation in simple trade models," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 16, pages 165-181, World Scientific Publishing Co. Pte. Ltd..
    4. Gene M. Grossman & Elhanan Helpman, 2005. "Outsourcing in a Global Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 135-159.
    5. repec:hrv:faseco:4784029 is not listed on IDEAS
    6. Ronald W. Jones & Sugata Marjit, 2018. "The Role of International Fragmentation in the Development Process," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 15, pages 255-261, World Scientific Publishing Co. Pte. Ltd..
    7. Ronald W. Jones & Henryk Kierzkowski, 2018. "International Fragmentation and the New Economic Geography," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 17, pages 281-293, World Scientific Publishing Co. Pte. Ltd..
    8. 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.
    9. Ronald Jones & Sugata Marjit, 2009. "Competitive trade models and real world features," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(1), pages 163-174, October.
    10. Marjit, Sugata, 2007. "Trade theory and the role of time zones," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 153-160.
    Full references (including those not matched with items on IDEAS)

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