This paper introduces the concept of intangible assets in sequential supply chains and the importance of their appropriability in the organizational decision of firms. We focus on the quality of intellectual property rights (IPR) institutions, which on top of the hold-up problem between a supplier and the final producer entails an additional risk of imitation as technology may leak to competing producers in the market. The level of IPR enforcement in the location of a supplier can therefore play a crucial role in determining the decision of a final good producer whether to outsource or integrate a particular stage of production. The analysis is performed with Antràs and Chor (2013) in the background, where the position of the input along the supply chain, i.e. its upstreamness, and the degree of sequential complementarity of stagespecific inputs influence the organizational strategy of firms through the incentive structure of supplier investments. Our findings show that introducing intangible assets in sequential supply chain may have the opposite effect of contractibility on outsourcing decision, where only tangible property rights are considered. We argue therefore that the risk of imitation is a relevant feature that needs to be accounted for in the incomplete contract literature. Our theoretical predictions are validated on Slovenian firm-level data.J.E.L. Classification: F12, F14, F21, F23, D23, L22, L23, L24, O34.

In a Ricardian model with CES preferences and general distributions of industry e¢ ciencies, the sources of the welfare gains from trade can be precisely decomposed into a selection and a reallocation e¤ect. The former is the change in average e¢ ciency due to the selection of industries that survive international competition. The latter is the rise in the weight of exporting industries in domestic production, due the reallocation of workers away from less-e¢ cient non-exporting industries. This decomposition, which is hard to calculate in the general case, simpli…es dramatically if industry e¢ ciencies are Fréchet distributed, providing easy-to-quantify model-based measures of these two e¤ects. Under this assumption, we also show that when the gains from trade are small, it is the selection e¤ect that matters most; as the gains from trade rise and the size of the export sector grows, so does the importance of the reallocation e¤ect.JEL classi…cation: F10, F11, F40

Multi-sector versions of the international trade model of Eaton and Kortum (2002) usually restrict trade elasticities to be identical across sectors, with potentially distorting e¤ects on the estimates of the model parameters. This paper allows for heterogeneous sectoral trade elasticities and quanti…es them by estimating an equation for bilateral market shares, with tari¤s and standard gravity variables used to model trade barriers. Results show that sectors di¤er signi…cantly in the size of trade elasticities. The paper proves that this heterogeneity matters at least in three di¤erent respects. First, it matters when inferring measures of relative productivity from trade and production data. Secondly, it matters when considering the trade-induced reallocations of production within and between sectors. When assessing their relative contribution to the productivity gains that each country obtains from opening to trade, gains turn out to be largely due to the reallocation within sectors, especially for richer countries. Finally, accounting for the heterogeneity in elasticities is crucial when running general equilibrium counterfactual studies, such as that performed in this paper, which assesses the e¤ects on aggregate of sector-speci…c technology shocks.

Share‐based payments are of widespread use in today's economy. Consulting firms are increasingly accepting equity compensation for their services (particularly from startups) and many governments provide fiscal incentives to support this choice. Likewise, profit‐sharing licensing is an on‐trend business practice by innovative firms and patent holders when transferring their technology to interested adopters. This paper unveils strategic considerations according to which an agent/seller designs its optimal policy in regard to the equity share to request in exchange for its service, technology, or trademark. The model assumes a fringe of interested users/customers differentiated by both the support they need from the seller and the value of the underlying relationship; and also holding an informational disadvantage on their own type. Given the seller's cost configuration, equilibrium outcomes entail entering a profit‐sharing relationship either with the high‐type customers only or with all customers. Yet, in this case, equity‐based payment claims are —for rent extraction purposes— common (i.e., not differentiated) across types.

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