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We develop a theory of a firm in an incomplete contracts environment which decides on the complexity, the organization, and the global scale of its production process. Specifically, the firm decides i) how many intermediate inputs are simultaneously combined to a final product, ii) if the...
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firms that are consistent with stylized facts from the recent empirical literature. -- multinational firms ; outsourcing … ; intra-firm trade ; offshoring ; vertical FDI …
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reduce the relative prevalence of FDI or foreign outsourcing. The impact on the composition of offshoring depends on whether … supplier locations, and then study the effects of changes in the quality of contractual institutions on the relative prevalence … of these organizational forms. Better contracting institutions in the South raise the prevalence of offshoring, but may …
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's organizational structure, and we analyze which sourcing mode (outsourcing or vertical integration) is chosen for which of the …
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