This paper introduces the theory of firm organization under moral hazard into an equilibrium model of international trade with heterogeneous talents and technologies. The model is able to explain how the allocation of power and the provision of financial incentives inside firms varies within and...

I analyse firms organisational choices when they face uncertainty about institutional conditions in foreign locations with heterogeneous final good producers and incomplete contracts. As firms learn about the conditions abroad, the increasing offshoring activity increases competition in the...

This paper studies the effect of trade facilitation on vertical firm structure using plant-level data from Switzerland. Based on the Business Census and the Input-Output table, we first calculate a binary measure of vertical integration for all plants registered in Switzerland. We then estimate...

To explain organizational decisions in multistage production processes we assume a production process with one producer and two suppliers of which one is the firm's direct supplier and the other one is the supplier of the supplier. The firm decides only on the organizational form of her direct...

Final good production often requires a firm's headquarter services and a foreign supplier's manufacturing input. With incomplete contracts, firms that decide whether to choose integration or outsourcing of this supplier do not only have to consider the ex ante investment incentives that...

Agricultural insurance does not only affect investment decisions in agriculture but also in a secondary, unrelated income earning activity that can serve as a risk mitigation and risk coping strategy, such as livestock farming. The value of insurance may depend on the market environment in the...

This paper examines the relationship between household structures, the institutions that shape them and physical and human capital accumulation using household and individual data from China, Indonesia, Côte d'Ivoire and Ghana. Household structures differ greatly across countries and are very...

This study examines the effect of two different finance trainings on business outcomes. The first training is based on a "rule-of-thumb" approach, teaching simple financial rules. The content of the second training is exactly the same but additionally provides personalized feedback on past...

The paper discusses the role of communication technologies in reducing the costs of using market exchange. It analyzes the comparative effect of new technologies on transactions which take place within and outside the firm using Coase’s postulate of the size of the firm. Technologically...

This paper examines the pattern of international capital flows in a two-sector dynamic general equilibrium heterogeneous agent model with financial frictions and idiosyncratic entrepreneurial risk. Countries differ only with respect to the tightness of constraints on the domestic credit market....