@article {248861,
	title = {Internalizing Global Value Chains: A Firm-Level Analysis},
	journal = {Journal of Political Economy},
	volume = {127},
	number = {2},
	year = {2019},
	pages = {509-559},
	abstract = {In recent decades, advances in information and communication technology and falling trade barriers have led firms to retain within their boundaries and in their domestic economies only a\&nbsp;subset of their production stages. A key decision facing firms worldwide is the extent of control\&nbsp;to exert over the different segments of their production processes. We describe a property-rights\&nbsp;model of firm boundary choices along the value chain that generalizes Antr{\`a}s and Chor (2013).\&nbsp;To assess the evidence, we construct firm-level measures of the upstreamness of integrated and\&nbsp;non-integrated inputs by combining information on the production activities of firms operating in more than 100 countries with Input-Output tables. In line with the model{\textquoteright}s predictions, we find that whether a firm integrates upstream or downstream suppliers depends crucially on the elasticity of demand for its final product. Moreover, a firm{\textquoteright}s propensity to integrate a given\&nbsp;stage of the value chain is shaped by the relative contractibility of the stages located upstream\&nbsp;versus downstream from that stage, as well as by the firm{\textquoteright}s productivity. Our results suggest\&nbsp;that contractual frictions play an important role in shaping the integration choices of firms\&nbsp;around the world.\&nbsp;\&nbsp;},
	url = {https://www.journals.uchicago.edu/doi/10.1086/700935},
	author = {Laura Alfaro and Pol Antr{\`a}s and Davin Chor and Paola Conconi}
}
