Global sourcing

Pol Antràs*, Elhanan Helpman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


We present a North-South model of international trade in which differentiated products are developed in the North. Sectors are populated by final-good producers who differ in productivity levels. On the basis of productivity and sectoral characteristics, firms decide whether to integrate into the production of intermediate inputs or outsource them. In either case they have to decide from which country to source the inputs. Final-good producers and their suppliers must make relationship-specific investments, both in an integrated firm and in an arm's-length relationship. We describe an equilibrium in which firms with different productivity levels choose different ownership structures and supplier locations. We then study the effects of within-sectoral heterogeneity and variations in industry characteristics on the relative prevalence of these organizational forms.

Original languageEnglish
Pages (from-to)552-580
Number of pages29
JournalJournal of Political Economy
Issue number3
StatePublished - Jun 2004


Dive into the research topics of 'Global sourcing'. Together they form a unique fingerprint.

Cite this