The Distributional Effects of International Fragmentation

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 0201

Classification and Topics

• Classification: Wirtschaft ; Factor Income Distribution ; Neoclassical Models of Trade ; Economic Integration ; Multinational Firms; International Business
• Subject: Globalisierung ; Outsourcing ; Faktorproportionentheorem ; Welt ; Verteilungswirkung

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kohler, Wilhelm
• Event: Veröffentlichung
• (who): Johannes Kepler University of Linz, Department of Economics
• (where): Linz
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/73205
• Last update: 10.03.2025, 11:42 AM CET