Globalization has been identified by many experts as a new way firms organize their activities and as the emergence of talent as the new stakeholder in the firm. This paper examines the role of trade integration for the changing nature of the corporation. International trade leads to a "war for...

This paper introduces an internal capital market into a two-factor model of multi-segment frms that features managers' empire building and informational frictionswithin the organization. Our novel theory shows that international trade imposesdiscipline on divisional managers and improves capital...