Institution-Driven Comparative Advantage and Organizational Choice

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way contract enforcement institutions determine international trade patterns. We find that the benefits of judicial quality for the exports of contract-intense goods are more muted in industries that have a greater propensity towards vertical integration arrangements with input suppliers. We show that our results are not driven by primitive industry characteristics. Our results confirm the role of judicial quality as source of comparative advantage and suggest that this depends not only on the technological characteristics of the goods produced but also on the way firms are able to organize the production process. JEL Classification Codes: D23, F10, F14, L22, L23.

Revealed comparative advantages and regional specialization: Evidence from Colombia in the Pacific Alliance

“…Consequently, another future line of research is to inquire into the variables that could explain the previously calculated CTB index. These variables are related to factor endowments, human capital and institutions (Costinot, 2009) including labor market regulations (2012; Cuñat & Melitz, 2010) and contract enforcement institutions (Costinot, 2009;Ferguson & Formai, 2013). Industry-specific volatility, like shocks in production techniques (Cun˜at & Melitz, 2012) should be mentioned as well, in addition to real exchange rates, which influence the costs of imported inputs.…”

Roadways, input sourcing, and patterns of specialization

“…To do so, we take the measure of contract intensity by industries from Nunn (2007), and split the sample of industries according to whether they rank below or above the median value of contract intensity. 42 If the Gini k were simply proxying for how sensitive to e¢ cient contract enforcement industry k is, then the estimate in column (1) should turn out to be signi…cantly milder than that one in column (2). The regressions show, however, that the negative correlation is signi…cant in both subsamples, and moreover the magnitude of the estimates is not signi…cantly di¤erent from one another.…”

Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics

“…The cross-industry cross-country approach has been widely used to examine the determinants of international trade and industrial specialization. Nunn (2007), Levchenko (2007), and subsequent works show that institutionally advanced countries tend to specialize in sec-tors that rely on di¤erentiated intermediate inputs (see also Ranjan and Lee, 2007;Ferguson and Formai, 2013;Nunn and Tre ‡er, 2014). Manova (2008Manova ( , 2013 links …nancial development to the patterns of international trade (see also Chan and Manova, 2015;Manova, Wei, and Zhang, 2015).…”