Research

"Organizational Forms of Importing Firms in U.S. Manufacturing"
Victor Shlychkov (2009)

Abstract: Importing firms in U.S manufacturing choose different organizational forms. This paper uses a unique firm-country dataset to examine how an importer's choice between outsourcing and vertical integration is related to three factors: share of inputs provided by the headquarters firm, the firm's productivity, and trade costs. Higher headquarters input share, higher productivity, and lower trade costs are associated with a higher importer's fraction of inputs that are intra-firm. These results are consistent with the theoretical models based on the property rights approach as opposed to those that emphasize the role of managerial incentives.