DP8598 Grossman-Hart (1986) Goes Global: Incomplete Contracts, Property Rights, and the International Organization of Production
|Publication Date:||October 2011|
|Keyword(s):||intrafirm trade, multinational firms, outsourcing, property rights|
|JEL(s):||D23, F10, F12, F14, F21, F23, L22, L23|
|Programme Areas:||Industrial Organization, International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=8598|
I survey the influence of Grossman and Hart's (1986) seminal paper in the field of International Trade. I discuss the implementation of the theory in open-economy environments and its implications for the international organization of production and the structure of international trade flows. I also review empirical work suggestive of the empirical relevance of the property-rights theory. Along the way, I develop novel theoretical results and also outline some of the key limitations of existing contributions.