Organizing the Global Value Chain

By Pol Antràs, D. Chor. 2012

703 citations recorded by the source corpus.

We develop a property-rights model of the firm in which production entails a continuum of uniquely sequenced stages. In each stage, a final-good producer contracts with a distinct supplier for the procurement of a customized stage-specific component. Our model yields a sharp characterization for the optimal allocation of ownership rights along the value chain. We show that the incentive to integrate suppliers varies systematically with the relative position (upstream versus downstream) at which the supplier enters the production line. Furthermore, the nature of the relationship between integration and "downstreamness" depends crucially on the elasticity of demand faced by the final-good producer. Our model readily accommodates various sources of asymmetry across final-good producers and across suppliers within a production line, and we show how it can be taken to the data with international trade statistics. Combining data from the U.S. Census Bureau's Related Party Trade database and estimates of U.S. import demand elasticities from Broda and Weinstein (2006), we find empirical evidence broadly supportive of our key predictions. In the process, we develop two novel measures of the average position of an industry in the value chain, which we construct using U.S. Input-Output Tables.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/7ce76d5d5f932c705748e921c0251e3820f749ce

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Citations in the corpus

Growing like China: Firm performance and global production line position (2020, positive): “owingAntràs et al. (2012),we scale dijby the factor Yi/(Yi−Xi+Mi−NIi),whereXi−Mi is equal to the net exports of i, andNIi is the net change in inventories of d in the IO Tables. This correction accounts for industry-i flows across country borders, aswell as into and out of inventories; as Antràs et ”
Climate Change and Adaptation in Global Supply-Chain Networks (2019, background): “Previous research on the endogenous formation of production networks has studied the role of ownership rights and contract enforcement practices (Antràs and Helpman, 2004; Antràs and Chor, 2013; Boehm and Oberfield, 2020), technological progress (Acemoglu and Azar, 2020), and their effect on aggrega”
Local sourcing in developing countries: The role of foreign direct investments and global value chains (2019, background): “Furthermore, macroeconomic factors such as a well-functioning business and institutional climate, and an educated and skilled labor force might constitute tipping points in lead firms’ strategic decisions and might influence the way countries participate in GVCs (Antràs and Chor 2013; Cattaneo et al”
Output Upstreamness and Input Downstreamness of Industries/Countries in World Production (2017, neutral): “(2012), Zavacka (2012), and Antràs and Chor (2013). Deriving the OUs and IDs on a world IO table sheds light on the position of industries/countries along the global output supply and global input demand chains, both characterizing world production.”
Endogenous Production Networks (2020, neutral): “Our paper is also related to the literature on sourcing decisions in international trade, for example, Chaney (2014), Antràs and Chor (2013), Eaton, Kortum, and Kramarz (2011), Antràs, Fort, and Tintelnot (2017), Lim (2017), and Tintelnot, Kikkawa, Mogstad, and Dhyne (2017).”
Toward a Dynamic Theory of Global Production Networks (2015, background): “…outsourcing tend to attribute causal effects to falling costs associated with improvements in communication and transportation technologies (Arndt and Kierzkowski 2001; Grossman and Rossi-Hansberg 2008) and specification of property rights (Antràs and Helpman 2004; Antràs and Chor 2013).”
Domestic Value Added in Exports: Theory and Firm Evidence from China (2015, neutral): “Related work by Antràs and Chor (2013) and Antràs, Chor, Fally, and Hillberry (2012) use IO tables to construct the upstreamness of industries.”
From micro to macro via production networks (2014, background): “Relatedly, recent theoretical work on global supply chains and the network structure of international trade can be another fruitful source of cross-talk on production networks (Antras and Chor 2013; Chaney 2013; Costinot et al. 2013).”
How Firms Export: Processing vs. Ordinary Trade with Financial Frictions (2016, neutral): “…has been the inference of domestic value added and production line position from trade flows and input–output tables at the country level (Johnson and Noguera, 2012; Antràs and Chor, 2013; Fally, 2011) and in China in particular (Brandt and Morrow, 2015; Kee and Tang, 2012; Koopman et al., 2011).”
Deep Trade Agreements and Global Value Chains (2018, positive): “Value added trade provides a more accurate measure of GVCs involvement.”