Using firm-level data on vertical integration of Korean manufacturers, the paper tests whether trade liberalization is an important determinant of firm's decision on vertical integration. We develop an empirical framework incorporating trade openness into industrial organization models;...

A model of heterogeneous firms with multiple products and two production factors (labor and capital) is used to study how trade liberalization affects firms’choices through both product and factor markets. Trade liberalization is shown to always redistribute capital toward more efficient firms...

A model of heterogeneous firms with multiple products and two production factors (labor and capital) is used to study how trade liberalization affects firms' choices through both product and factor markets. Trade liberalization is shown to always redistribute capital toward more efficient firms...