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Fragmentation of the value-added-chain is modeled as the reaction of monopolistically competitive firms to the removal of barriers to trade and factor mobility in an integrated trading environment. Since fragmentation requires high-skilled labor, this form of globalization can induce labor...
Persistent link: https://www.econbiz.de/10005765641
This paper proposes a model in which the removal of barriers to trade and factor mobility is associated with endogenous fragmentation of the value-added chain. Fragmentation is the outcome of cost competition the profit-maximizing choice of cost structure by monopolistically com-petitive firms....
Persistent link: https://www.econbiz.de/10005181462