VOLUMEN XXIII |
INVIERNO 2015 |
WHICH FIRMS ARE INVOLVED IN FOREIGN VERTICAL INTEGRATION?
|
A. PELEGRÍN J. GARCÍA-QUEVEDO Universidad de Barcelona (UIB) |
In line with the literature that considers that transaction costs, asset specificity
and incomplete contracts play a key role in the "make or buy decision",
this paper seeks to identify the characteristics of offshoring firms that make
them more or less likely to integrate their activities in a foreign country. Our
results show that the real candidates for foreign vertical integration are those
firms that have a large share of their inputs provided by headquarters. Firms
engaged in foreign vertical integration are more capital and skill-intensive
than those exclusively dedicated to foreign outsourcing. The degree of foreign
vertical integration also matters since the most intensively integrated
firms are also the most productive. We also demonstrate that international
experience and product differentiation favor foreign vertical integration. |
Key words: offshoring, vertical integration, firm heterogeneity. Clasificación L23, F23, D21. |
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