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The Nature of the Evolution of Global Production

Huanlang He

& Zhihao Yu

Working paper

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Zhihao Yu

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In this paper we extend Antras and Helpman (2004)¡¦s framework to investigate the decision choice for different organizational forms of production in a model when heterogenous firms produce multi-products.

In so doing, we are able to discuss how multi-product firms choose different organizational forms for different products along their product lines/scope.

Thus, we are able to discuss not only the pattern of different organizational forms of heterogeneous firms in a particular product market, but also the prevalence of different organizational forms in a product line/scope by a particular firm.