Culture and Global Sourcing

  title={Culture and Global Sourcing},
  author={Yuriy Gorodnichenko and Bohdan Kukharskyy and G. Roland},
  journal={International Trade eJournal},
This paper develops a model of global sourcing with culturally dissimilar countries. Production of final goods requires the coordination of decisions between the headquarter of a multinational firm and managers of their component suppliers. Managers of both units are assumed to have strong beliefs about the right course of action and are reluctant to adjust their decisions. We characterize the optimal allocation of decision rights across firms when contracts are incomplete. Our theoretical… Expand
Relational contracts and global sourcing
Relational contracts – informal agreements sustained by the value of future relationships – are integral parts of global production processes. This paper develops a repeated-game model of globalExpand
Supply Chain Integration: A Theory Based on Collusion and Communication Costs
We develop a theory of backward integration of a downstream firm owner/HQ whereby it contracts directly with a worker/upstream producer A, instead of delegating this to an informed intermediary S whoExpand
Contracting institutions and firm boundaries
Contractual frictions are widely known to shape firm boundaries. But do better contracting institutions, which reduce these frictions, induce firms to be more or less deeply integrated? This paperExpand
Uncertainty, Risk Aversion and International Trade
In this paper, I study the impact of uncertainty in the delivery of inputs on international trade patterns. I develop a model of sourcing decisions where risk-averse managers can contract withExpand
Business Groups as Knowledge-Based Hierarchies of Firms ∗
We propose a new theory of business groups as knowledge-based hierarchies that arise when contractual incompleteness may lead to dissipation of firms’specific knowledge. The theory predicts that aExpand
Bypassing Intermediaries via Vertical Integration : A Transaction-Cost-Based Theory
We provide a theory of vertical integration motivated to bypass intermediaries and contract directly with workers or customers in order to reduce double marginalization of rents. Non-integrationExpand
THE DEEP HISTORICAL ROOTS OF MODERN CULTURE: A COMPARATIVE PERSPECTIVE.* Based on Keynote lecture at 2nd World Congress in Comparative Economics, June 2017
This paper presents evidence showing that since antiquity there have been two opposed types of institutional systems: one resembling central planning and present in ancient China, ancient Egypt, theExpand
Comparative Economic History


Global Sourcing
We present a North-South model of international trade in which differentiated products are developed in the North. Sectors are populated by final-good producers who differ in productivity levels.Expand
Contractual Frictions and Global Sourcing
We generalize the Antras and Helpman (2004) model of the international organization of production in order to accommodate varying degrees of contractual frictions. In particular, we allow the degreeExpand
Relational contracts and global sourcing
Relational contracts – informal agreements sustained by the value of future relationships – are integral parts of global production processes. This paper develops a repeated-game model of globalExpand
Trade Liberalization and Organizational Change
We embed a simple incomplete-contracts model of organization design in a standard two-country perfectly-competitive trade model to examine how the liberalization of product and factor markets affectsExpand
Power in the multinational corporation in industry equilibrium
Recent theories of the multinational corporation introduce the property rights model of the firm and examine whether to integrate or outsource firm activities locally or to a foreign country. ThisExpand
Global Production: Firms, Contracts, and Trade Structure
Global Production is the first book to provide a fully comprehensive overview of the complicated issues facing multinational companies and their global sourcing strategies. Few international tradeExpand
Multinational Firms and the Structure of International Trade
This chapter reviews the state of the international trade literature on multinational firms. This literature addresses three main questions. First, why do some firms operate in more than one countryExpand
Integration vs. Outsourcing in Industry Equilibrium
We develop an equilibrium model of industrial structure in which the organization of firms is endogenous. Differentiated consumer products can be produced either by vertically integrated firms or byExpand
Global Sourcing Decisions and Firm Productivity: Evidence from Spain
We investigate the link between productivity of firms and their sourcing behavior. Following Antras & Helpman (2004) we distinguish between domestic and foreign sourcing, as well as betweenExpand
A Price Theory of Vertical and Lateral Integration
This article presents a perfectly-competitive model of firm boundary decisions and study their interplay with product demand, technology, and welfare. Integration is privately costly but is effectiveExpand