Author： Costinot Arnaud Vogel Jonathan Wang Su
Publisher： Oxford University Press
ISSN： 0034-6527
Source： The Review of Economic Studies, Vol.80, Iss.1, 2013-01, pp. : 109-144
Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.
Abstract
This article develops an elementary theory of global supply chains. We consider a world economy with an arbitrary number of countries, one factor of production, a continuum of intermediate goods and one final good. Production of the final good is sequential and subject to mistakes. In the unique free trade equilibrium, countries with lower probabilities of making mistakes at all stages specialize in later stages of production. Using this simple theoretical framework, we offer a first look at how vertical specialization shapes the interdependence of nations.
Related content
Global Supply Chains and Wage Inequality
By Costinot Arnaud Vogel Jonathan Wang Su
The American Economic Review, Vol. 102, Iss. 3, 2012-05 ,pp. :
Access to resources
Recommend
