Trade liberalization and organizational change

• 成果类型: Article
• 署名作者: Conconi, Paola; Legros, Patrick; Newman, Andrew F.
• 署名单位: Universite Libre de Bruxelles; Boston University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2011.11.002
• 发表日期: 2012
• 页码: 197-208
• 关键词: Theory of the firm; incomplete contracts; GLOBALIZATION

摘要

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 affects the ownership structure of firms. In our model, managers decide whether or not to integrate their firms, trading off the pecuniary benefits of coordinating production decisions with the private benefits of operating in their preferred ways. The price of output is a crucial determinant of this choice, since it affects the size of the pecuniary benefits. Organizational choices also depend on the terms of trade in supplier markets, which affect the division of surplus between managers. We show that, even when firms do not relocate across countries, the price changes triggered by the liberalization of product markets can lead to changes in ownership structures within countries. The removal of barriers to facto: mobility can also induce widespread restructuring, which can lead to increases in product prices (or declines in quality), hurting consumers worldwide. (C) 2011 Elsevier B.V. All rights reserved.