Industrial Structure and International Trade

Abstract:

The anticipated project will be in the economics of industrial organization. In our initial communication we have identified a potential project related to the organization of supply chains. A recent theoretical literature has developed hypotheses for how ownership structure is determined along the supply chain. Partially due to data availability, however, the empirical evidence for these theories has used measures of the position of industries in the supply chain rather than individual firms. This aggregated approach ignores heterogeneity among firms within an industry. Using a unique firm-level Japanese data set, we wish to create rather a firm-level measure of supply chain position. Using such a measure, we may be able to develop a test of recent theories of ownership structure along the supply chain. In addition, the correlations between supply chain position and investment and other firm decisions will help to motivate new theories of firm behaviour.