paper is motivated by recent evidence that trade has greatly expanded on the extensive margin (aka fragmentation, offshoring … understood, a sufficient condition for all countries to gain from fragmentation is that the relative world prices of initially … results in interesting subtleties as initially-traded goods change their trade status following fragmentation. I illustrate …

of trade are higher with fragmentation for most countries but interestingly, for a large block of countries, these … variables fall following fragmentation. Countries with moderate trade costs engage in market-oriented assembly, while those with … trade accelerate as trade costs go to zero with and without fragmentation …

trade. One simple taxonomy separates the theory into vertical' models in which firms geographically separate activities by …