TY - BOOK ID - 133407908 TI - A Coasian Model of International Production Chains AU - Fally, Thibault AU - Hillberry, Russell PY - 2015 PB - Washington, D.C. : The World Bank, DB - UniCat KW - Boundary of the firm KW - Economic theory & research KW - Emerging markets KW - Fragmentation of production KW - Free trade KW - International economics & trade labor policies KW - Macroeconomics and economic growth KW - Private sector development KW - Social protections and labor KW - Trade in intermediate goods KW - Trade policy KW - Transaction costs UR - https://www.unicat.be/uniCat?func=search&query=sysid:133407908 AB - International supply chains require the coordination of numerous activities across multiple countries and firms. This paper develops a theoretical model of supply chains in which the measure of tasks completed within a firm is determined by parameters that define transaction costs and the cost of coordinating more activities within the firm. The structural parameters that govern these costs explain variation in supply chain length as well as cross-country variation in gross-output-to-value-added ratios. The structural parameters are linked to comparative advantage along and across supply chains. The paper provides an analytical treatment of trade and welfare responses to trade cost change in a simple two-country model. To explore the models implications in a richer setting, the model is calibrated to match key observables in East Asia, and the calibrated model is used to evaluate implications of changes in model parameters for trade, welfare, the length of supply chains, and countries relative position within them. ER -