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...

International fragmentation, or outsourcing, is often referred to as a distinctly novel feature in today's global economy. First observed in the US-Mexican context, the phenomenon is increasingly catching policy makers' attention also in Europe. As barriers between east and west are...

I develop a generalized factor price frontier which incorporates endogenous adjustment of international fragmentation in multistage production, allowing for a continuum of stages. This allows us to address fragmentation, not only as an exogenous event, but also as an integral part of endogenous...

This article contributes to a clear understanding of important aspects of economic globalization. Specifically, we want to highlight the distributional concerns and how these are related to efficiency aspects of globalization. To this end, we identify relevant scenarios within a simple model of...

The paper uses a specific-factors framework to address efficiency and distributional implications of international fragmentation which is driven by a foreign location advantage due to a low wage rate. Focusing on the cost-savings linkage between fragmentation and labor demand in the remaining...