The word fragmentation refers to a splitting up of a verticallyintegrated production process such that the separatefragments can be traded on markets. This paper is concerned withinternational fragmentation, generally allowing gainsfrom a finer division of labor based on comparative advantage...

Today’s global world is characterized not only by a high volume ofinternational trade and foreign investment relativeto national income, but also by a changed composition of that tradetowards a greater fraction of trade in inputs andcapital goods and outsourcing of production.. Emphasized is...

This paper presents a simple model of a small open economy which is open to both commodity trade and foreign investment of a sector-specific kind, and which exhibits the phenomenon of ‘cross-hauling’, or reverse flows of internationally mobile capital in two different sectors. The model,...