DP3640 Globalization and the 'New Enterprise'

Author(s): Dalia Marin, Thierry Verdier
Publication Date: November 2002
Keyword(s): corporate governance, empowerment, international trade with imperfect competition, outsourcing, theory of the firm
JEL(s): D23, F12, L10, L20
Programme Areas: Industrial Organization, International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=3640

Globalization has been identified by many experts as a new way firms organize their activities. This Paper surveys recent work that examines the role of trade integration between similar and dissimilar countries for these changes in corporate organization. It is shown that international competition and international trade both increase the stakes of the firm, which affects the behaviour of agents inside the corporation. This way, trade integration leads to waves of outsourcing and to convergence in corporate cultures across countries.