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http://hdl.handle.net/10419/22172
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| Title: | | International Trade, Flexible Manufacturing and Outsourcing  |
| Authors: | | Eckel, Carsten |
| Issue Date: | | 2005 |
| Series/Report no.: | | CeGE discussion paper 45 |
| Abstract: | | This study analyzes the impact of international trade on the diffusion of flexible manufacturing in a general equilibrium framework. Suppliers produce a flexible base product that can be adapted to the specific input requirements of a continuum of downstream industries. The vertical structure is determined by the trade-off between economies of scope in flexible manufacturing and product specificity of in-house production. In this framework, globalization can lead to alternating waves of insourcing and outsourcing, but once the world market reaches a threshold size, outsourcing prevails. We also derive a number of testable predictions with regard to firm size and productivity measures that are in line with recent empirical and casual evidence. |
| Subjects: | | International Trade Flexible Manufacturing Outsourcing Vertical Integration Globalization General Equilibrium |
| JEL: | | L11 F12 L22 |
| Document Type: | | Working Paper |
| Appears in Collections: | | cege-Diskussionspapiere, Universität Göttingen
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