Please use this identifier to cite or link to this item: https://repository.iimb.ac.in/handle/2074/22242
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dc.contributor.authorGarg, Shresth
dc.contributor.authorGhosh, Pulak
dc.contributor.authorTan, Brandon Joel
dc.date.accessioned2024-02-20T05:55:26Z-
dc.date.available2024-02-20T05:55:26Z-
dc.date.issued2023
dc.identifier.issn0022-1996
dc.identifier.issn1873-0353
dc.identifier.urihttps://repository.iimb.ac.in/handle/2074/22242-
dc.description.abstractThere are competing theories on whether vertical ownership is motivated by the transfer of physical inputs or the transfer of intangibles. Using administrative data on the universe of goods shipments in Karnataka, India, we show that the supply of goods along the production chain is an important rationale for vertical integration. First, we develop and estimate a gravity model of input sourcing, and find that: (1) establishments have a strong preference for sourcing their physical inputs from suppliers within the same firm relative to other frictions such as distance and state borders, and (2) the share of within-firm trade would be near 2% absent this preference for internal suppliers. Next, we compare this to the data and find that 38% of products are sourced by establishments exclusively from within the firm when a vertically integrated supplier exists
dc.description.abstractan order of magnitude higher than our 2% benchmark. Finally, we validate that within-firm sourcing is associated with determinants of physical supply chain transaction costs such as product specificity and R&D investment.
dc.publisherElsevier
dc.subjectVertical integration
dc.subjectSupply chains
dc.subjectTrade
dc.subjectContracting
dc.titleWithin firm supply chains: Evidence from India
dc.typeJournal Article
dc.identifier.doi10.1016/j.jinteco.2023.103793
dc.pagesAN:103793
dc.vol.noVol.144
dc.journal.nameJournal of International Economics
Appears in Collections:2020-2029 C
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