Institutional Affiliations: Paris School of Economics and CEPII
|The Factory-Free Economy: Outsourcing, Servitization and the Future of Industry|
with : w23016
The shift towards a “factory-free” economy has drawn the attention of policy makers in North America and Europe. Some politicians have articulated alarming views, initiating mercantilist or ‘beggar-thy-neighbour’ cost-competitiveness policies. Yet companies that concentrate research and design innovations at home but no longer have any factories there may be the norm in the future. This paper summarizes the key themes emerging from a conference on de-industrialization. De-industrialization is a process that happens over time in all countries, even China. The distinction between manufacturing and services is likely to become increasingly blurry. More manufacturing firms are engaging in services activities, and more wholesale firms are engaging in manufacturing. One optimistic perspective...
|Cherries for Sale: Export Networks and the Incidence of Cross-Border M&A|
with , , : w18414
This paper develops a dynamic model of cross-border M&A activity. We show that foreign firms will be relatively more attracted to targets in the domestic country that had high productivity levels several years prior to acquisition, but then suffered a negative productivity shock (i.e., cherries for sale). With high ex ante productivity levels, target firms are able to invest in large export networks that are valuable to foreign multinationals because of locational differences and trade costs. Subsequently, domestic firms that experience reductions in productivity no longer find their established network as valuable to serve independently, increasing the surplus generated by a foreign acquisition. From the theory we derive a dynamic panel binary choice empirical model that uses predetermine...
Published: Journal of International Economics Volume 94, Issue 2, November 2014, Pages 341–357 Cover image Cherries for sale: The incidence and timing of cross-border M&A ☆ Bruce A. Blonigena, b, , , Lionel Fontagnéc, , Nicholas Slya, d, , Farid Toubale,