DP8598 Grossman-Hart (1986) Goes Global: Incomplete Contracts, Property Rights, and the International Organization of Production

Author(s):	Pol Antràs
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.