ECARES, Université Libre de Bruxelles
Avenue F.D. Roosevelt, 42
1050 Bruxelles - Belgium
Institutional Affiliations: Université Libre de Bruxelles and CEPR
Information about this author at RePEc
NBER Working Papers and Publications
|May 2018||Come Together: Firm Boundaries and Delegation|
with Laura Alfaro, Nicholas Bloom, Harald Fadinger, Patrick Legros, Andrew Newman, Raffaella Sadun, John Van Reenen: w24603
Little is known about the relationship between firm boundaries and the allocation of decision rights within firms. We develop a model in which final good producers choose which suppliers to integrate and whether to delegate decisions to integrated suppliers, when they are ex-ante uncertain about their ability. In this setting, integration has an option value: ownership rights give producers authority to delegate or centralize production decisions, depending on the realized ability of suppliers. To assess the evidence, we construct measures of vertical integration and delegation for thousands of firms in many countries and industries. Consistent with the model, we find that (i) integration and delegation co-vary positively; (ii) firms delegate more decisions to integrated suppliers of more ...
|September 2015||Internalizing Global Value Chains: A Firm-Level Analysis|
with Laura Alfaro, Pol Antràs, Davin Chor: w21582
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 subset of their production stages. A key decision facing firms worldwide is the extent of control to exert over the different segments of their production processes. We describe a property-rights model of firm boundary choices along the value chain that generalizes Antràs and Chor (2013). To assess the evidence, we construct firm-level measures of the upstreamness of integrated and 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's predictions, we find that whether a firm integrates u...
Published: Laura Alfaro & Pol Antràs & Davin Chor & Paola Conconi, 2019. "Internalizing Global Value Chains: A Firm-Level Analysis," Journal of Political Economy, vol 127(2), pages 508-559.
|June 2014||Guns and Votes|
with Laurent Bouton, Francisco Pino, Maurizio Zanardi: w20253
Why are U.S. congressmen reluctant to support gun control regulations, despite the fact that most Americans are in favor of them? We argue that re-election motives can lead politicians to take a pro-gun stance against the interests of an apathetic majority of the electorate, but in line with the interests of an intense minority. We develop a model of gun control choices in which incumbent politicians are both office and policy motivated, and voters differ in the direction and intensity of their preferences. We derive conditions under which politicians support gun control early in their terms, but oppose them when they approach re-election. We test the predictions of the model by analyzing votes on gun-related legislation in the U.S. Senate, in which one third of the members are up for re-e...
|June 2010||Do Prices Determine Vertical Integration?|
with Laura Alfaro, Harald Fadinger, Andrew F. Newman: w16118
What is the relationship between product prices and vertical integration? While the literature has focused on how integration affects prices, this paper provides evidence that prices can affect integration. Many theories in organizational economics and industrial organization posit that integration, while costly, increases productivity. It follows from firms' maximizing behavior that higher prices induce more integration. The reason is that at low prices, increases in revenue resulting from enhanced productivity are too small to justify the cost, whereas at high prices the revenue benefit exceeds the cost. Trade policy provides a source of exogenous price variation to assess the validity of this prediction: higher tariffs should lead to higher prices and therefore to more integration. We c...
Published: Laura Alfaro & Paola Conconi & Harald Fadinger & Andrew F. Newman, 2016. "Do Prices Determine Vertical Integration?," The Review of Economic Studies, vol 83(3), pages 855-888. citation courtesy of