Relationship-Specific Investments and Contract Enforcement with Heterogeneous Suppliers
2013/09/10
研討會日期 : 2013-09-10
時間 : 14:30
主講人 : Professor Alireza Naghavi
地點 : Conference Room C103
演講者簡介 : Alireza Naghavi received his Ph.D. in Economics from University College Dublin in 2004. He is currently Assistant Professor of Economics at University of Bologna. His research fields are international trade and migration, political economy and development, and intellectual property rights and innovation.
演講摘要 : This paper studies the impact of the contract enforcement on multinationals’ choice of input suppliers and industry profits in a host economy. The framework consists of suppliers with heterogeneous capabilities who must engage in a relation-specific investment to customize intermediate inputs upon a transfer payment by final producers. An outsourcing contract with better technologically-endowed suppliers requires a lower transfer and generates a higher surplus. Stronger contract enforcement leads firms to self-select into better quality suppliers on average by reducing their outside option. Weak legal institutions instead make it possible for a larger range of suppliers, including the less capable ones, to form partnerships by granting them a larger outside option. A better contractual environment is more likely to harm lagging countries where the technology distribution is characterized by less capable suppliers.
