In the field of economics, a vast literature has attributed the rise of global value chains to globalization-related forces such as declining costs of transportation, improvements in communications technology, and institutional and policy reforms in developing countries. Through an in-depth...

Previous studies have argued that global value chains (GVCs) have increased the sensitivity of trade to foreign income shocks. This may occur either because GVC trade is concentrated in durable goods industries, which are known to have high income elasticities (a composition effect), or because,...

This paper examines the role of contracting institutions on a multinational firm's optimal ownership strategy. We develop a model in which both a multinational firm and its local joint venture partner can ex post engage in costly rent-seeking actions to increase their ex ante agreed upon revenue...

In the past few decades, East Asia has become a key player in the global value chains of products that are consumed in Western markets. In this paper, we discuss how idiosyncratic shocks propagate through global value chains, and assess how this has affected East Asian countries' vulnerability...

The surge of oil prices in recent years has led to speculation that rising transportation costs could end the period of dramatic world trade growth in the words of Rubin (2009), …Your world is going to get a whole lot smaller. Using data from China's Customs Statistics, we examine the impact of...

China has become the center of virtually any discussion about globalization and its impact on the Canadian economy. According to a recent opinion poll by the Asia-Pacific Foundation of Canada (APFC), Canadians believe that China is the second most important country/region for Canada's prosperity...

In this discussion report, we dispel the widely held misconception that China's economy is excessively export-dependent and therefore particularly vulnerable to a drop in export demand. In the past two decades, China's dramatic exports rise has largely been driven by the fact that many foreign...

China's emergence as a key player in the global electronics industry has ignited concerns among its East Asian neighbors. Upper and middle-income economies fear that China's rise is hollowing out their electronics industrial base. Lower-income economies worry that they cannot compete with...

This paper investigates the role of productivity on a firm's organizational choice. We expand Antràs and Helpman (2004) by allowing heterogeneous firms to choose between adopting specific and generic inputs. In input-intensive industries, firms face a trade-off between the lower productivity of...

In recent decades, complex manufacturing sectors such as electronics have transformed from an industry dominated by vertically integrated firms that source locally to an industry dominated by horizontally specialized firms that source globally. To account for this, we build an two-country...