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

  • Jung Hur

    ()

    (Department of Economics, Sogang University, Seoul)

  • Hea-Jung Hyun

    ()

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

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).

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File URL: ftp://163.239.165.41/RePEc/sgo/wpaper/HJ_RIME_2011-06.pdf
File Function: First version, 2011
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Paper provided by Research Institute for Market Economy, Sogang University in its series Working Papers with number 1106.

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Length: 25 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:sgo:wpaper:1106
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Web page: http://home.sogang.ac.kr/sites/sgrimeEmail:


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