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International Trade and Local Organization of Production - Two Elementary Propositions

  • Sugata Marjit

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.

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File URL: http://www.nottingham.ac.uk/gep/documents/papers/2009/09-16.pdf
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Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 09/16.

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Handle: RePEc:not:notgep:09/16
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  1. Pol Antras & Elhanan Helpman, 2003. "Global Sourcing," Harvard Institute of Economic Research Working Papers 2005, Harvard - Institute of Economic Research.
  2. Ronald Jones & Sugata Marjit, 2009. "Competitive trade models and real world features," Economic Theory, Springer, vol. 41(1), pages 163-174, October.
  3. Deardorff, Alan V., 2001. "Fragmentation in simple trade models," The North American Journal of Economics and Finance, Elsevier, vol. 12(2), pages 121-137, July.
  4. Helpman, Elhanan, 2006. "Trade, FDI and the Organization of Firms," CEPR Discussion Papers 5589, C.E.P.R. Discussion Papers.
  5. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  6. Jones, Ronald W. & Kierzkowski, Henryk, 2005. "International fragmentation and the new economic geography," The North American Journal of Economics and Finance, Elsevier, vol. 16(1), pages 1-10, March.
  7. repec:hrv:faseco:4784029 is not listed on IDEAS
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