Trade liberalization, outsourcing, and the hold-up problem

• 成果类型: Article
• 署名作者: Ornelas, Emanuel; Turner, John L.
• 署名单位: University System of Georgia; University of Georgia
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2007.02.005
• 发表日期: 2008
• 页码: 225-241
• 关键词: International trade; Outsourcing; hold-up problem; vertical integration; investment effect

摘要

This paper shows that, in a bilateral relationship where a foreign supplier has to make a relationship-specific investment but cannot enforce a complete contract, the standard hold-up problem of underinvestment is aggravated when trade incurs a tariff. In this context, we identify two new channels through which trade liberalization enhances international trade. First, lower tariffs increase the incentives of foreign suppliers to undertake cost-reducing investments. Second, lower tariffs may prompt vertical multinational integration. These indirect effects imply that responses of trade volumes to trade liberalization are greater than standard trade models suggest and help explain current trends toward foreign outsourcing and intra-firm trade. (C) 2007 Elsevier B.V. All rights reserved.