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Trade Openness and Vertical Structure:Evidence from Korean Firm-Level Data

Author

Listed:
  • Jung Hur

    (Department of Economics, Sogang University, Seoul)

  • Hea-Jung Hyun

    (Department of International Trade, Dankook University, Gyeonggi-do, Korea)

Abstract

Recent theories and empirics suggest that trade openness increases world trade through production fragmentation across countries. In this paper we focus on the relationship between trade openness and firms¡¯ choices of vertical structure. We find firm-level data evidence that upon trade liberalization firms have been restructuring their organization by downsizing their domestic production processes (i.e. domestic vertical disintegration), and relocating their input production plants to other countries (i.e. cross-border vertical integration).

Suggested Citation

  • Jung Hur & Hea-Jung Hyun, 2011. "Trade Openness and Vertical Structure:Evidence from Korean Firm-Level Data," Working Papers 1106, Research Institute for Market Economy, Sogang University.
  • Handle: RePEc:sgo:wpaper:1106
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Trade Openness; Vertical Integration; Intra-Firm Trade; Foreign Outsourcing;
    All these keywords.

    JEL classification:

    • 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

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