Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73205
Authors: 
Kohler, Wilhelm
Year of Publication: 
2002
Series/Report no.: 
Working Paper, Department of Economics, Johannes Kepler University of Linz 0201
Abstract: 
Economic globalization causes an increasing international fragmentation (disintegration) of value-added-chains, whereby firms outsource components of production to foreign markets. There is a high level of concern about unwelcome distributional effects. This paper provides a theoretical treatment of this issue within a general Heckscher-Ohlin framework, allowing for an arbitrary number of goods, factors, and fragments. It shows how a fragmented production equilibrium is disturbed by lower costs of fragmentation, and it introduces the concept of effective prices of fragments to derive general results that characterize the distributional consequences of an increase in international fragmentation occurring simultaneously in several industries.
JEL: 
D33
F11
F15
F23
Document Type: 
Working Paper

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