Culture and Global Sourcing

@article{Gorodnichenko2015CultureAG,
  title={Culture and Global Sourcing},
  author={Yuriy Gorodnichenko and Bohdan Kukharskyy and G. Roland},
  journal={International Trade eJournal},
  year={2015}
}
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
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