Global Production is the first book to provide a fully comprehensive overview of the complicated issues facing multinational companies and their global sourcing strategies. Few international trade transactions today are based on the exchange of finished goods; rather, the majority of transactions are dominated by sales of individual components and intermediary services. Many firms organize global production around offshoring parts, components, and services to producers in distant countries, and contracts are drawn up specific to the parties and distinct legal systems involved. Pol Antràs examines the contractual frictions that arise in the international system of production and how these frictions influence the world economy.
Antràs discusses the inevitable complications that develop in contract negotiation and execution. He provides a unified framework that sheds light on the factors helping global firms determine production locations and other organizational choices. Antràs also implements a series of systematic empirical tests, based on recent data from the U.S. Customs and Census Offices, which demonstrate the relevance of contractual factors in global production decisions.
Using an integrated approach, Global Production is an excellent resource for researchers, graduate students, and advanced undergraduates interested in the inner workings of international economics and trade.
Pol Antràs is the Robert G. Ory Professor of Economics at Harvard University and a research associate at the National Bureau of Economic Research.
"The field of international trade has been transformed in recent decades by a shift in attention to firm heterogeneity and organization. This outstanding volume by one of the foremost contributors to the field is essential reading for trade economists and a cornerstone for graduate and undergraduate courses in international trade."--Stephen J. Redding, Princeton University
"International trade theories focus on what to produce and for whom, but have less to say about how to produce it or where. Those last questions take on great importance when contracts between firms are incomplete and in this valuable book, Pol Antràs provides accessible answers. Global Production is ideal for students and researchers who want to understand how the field of international trade has evolved."--Robert C. Feenstra, University of California, Davis
"Pol Antràs is widely recognized as the world’s leading expert on the theory and empirics of offshoring, outsourcing, and global value chains. In this lucid, comprehensive, and fascinating book, Antràs applies modern contract theory to help us understand the internationalization and location decisions of multinational firms. Graduate students and researchers will find themselves transported right to the research frontier."--Gene M. Grossman, coauthor of Interest Groups and Trade Policy
"Antràs is the world’s keenest observer of our age of global production and one of the smartest economists on the planet. With this book, his thinking about multinationals and offshoring is finally available to a wider audience. The volume is brimming with humor, lively anecdotes, philosophical musings, and other insights that could not possibly be outsourced to China."--Daniel Trefler, University of Toronto
Table of Contents:
I Introduction 1
1 Made in theWorld 3
2 Workhorse Models 28
II Location 57
3 Contracts and Export Behavior 59
4 Contracts and Global Sourcing 94
5 Contracts and Sourcing: Evidence 128
III Internalization 167
6 The Transaction-Cost Approach 169
7 The Property-Rights Approach 192
8 Internalization: Empirical Evidence 217
IV Appendixes 263