Brown Bag Seminar: "Backward versus Forward Integration of Firms in Global Value Chains"

Abstract

The international division of production along with firm boundaries that reach beyond national borders has important implications for the geography of asset ownership. This paper seeks to understand the forces that determine the geography of asset ownership in global value chains. We augment a standard model of vertical integration rooted in the property-rights theory and derive four channels of influence for the international geography of asset ownership: the relative investment intensity of sectors and countries; the relative density of markets; the relative reliance on and importance of supplying and producing country-sectors; and the relative importance of fixed integration costs. We confirm the relevance of these determinants for the observed geography of asset ownership in a large panel of worldwide directed ownership linkages.

Biography of Speaker

Katharina is a professor of economics at Heinrich Heine University Düsseldorf and the Düsseldorf Institute for
Competition Economics (DICE). She is also a research affiliate at CESifo.

Her research focuses on international economics, trade, and trade policy. She is particularly interested in
understanding firm-level heterogeneity as a driver of international trade and firm behavior in the context of international trade.