Outsourcing, Regional Trade and Specialization: An Application to in the German Pig Sector
نویسنده
چکیده
The global trend of industrializing agriculture increasingly transforms farms and firms into specialized component suppliers within a multi-stage food processing chain, which creates intraindustry trade betweenand within geographical regions. This can be analyzed within the framework of a hypothetical multiregional food-processing firm that benefits from outsourcing various ‘tasks’ to other sub-contracting regions, in order to utilize lower production cost there. This is modeled as a multi-output cost minimization problem of the processing firm, and it is argued that with respect to agriculture, the outsourcing opportunities for the firm are determined by economies of diversification. Trade is implicitly reflected as the movement of intermediate factors towards the processing firm, and firm-level specialization of the sub-contractors is an observable outcome. This framework is applied to pig production in 1150 municipalities in southern Germany. The estimated multi-output production frontier is decomposed according to a primal measure of diversification economies. Results show that pig farms located closer to slaughterhouses tend to specialize more in one of the tasks ‘piglet production’, ‘rearing’ or ‘fattening’, while farms in regions distant from slaughterhouses tend to in-source all of these tasks. Future research may extend the framework towards comparative static analyses of relevant policies.
منابع مشابه
The Age of Globalization and its Impact on Asia's Agricultural Trade : An Application of a Chain Comparative Advantage Index
Due to timely process of WTO negotiations, unwillingness of advanced industrial countries to give concessions to developing economies regarding tariff and non-tariff barriers on agricultural commodity imports, the ongoing initiatives in Northern hemisphere to establish new and wider free trading areas which will divert trade out of the market from Asian countries, and ineffectiveness of deepeni...
متن کاملThe Size of Rent-seeking Activity in Iran's Foreign Trade Sector: An Application of the DSGE Approach
Rent-seeking in the trade sector is an outcome of restrictions imposed on tariffs and import quotas by a government. In an effort to acquire more privilege in foreign trade, labor allocates a part of its time-effort to rent-seeking activity, while cutting down on production work. Given the importance of rent-seeking activity due to restrictions imposed by the government in the Iranian economy, ...
متن کاملFinancial Crisis and Steel Trade Integration in Asia and Pacific: A Static and Dynamic Analysis
The objective of this paper is to explore the effect of financial crisis on trade flows of steel industries in the major Asian-Pacific steel producing countries. Using a static and dynamic panel data analysis, we test the hypothesis that the global financial crisis has a negative effect on Asia-Pacific bilateral steel trade flows. We also examine the role of regional trade integration in bilate...
متن کاملAn Analysis of International Outsourcing in Iran-China Trade Relations
Iran-China relations are deeply rooted in history and have been enhanced recently with bilateral cooperation in the areas of energy, arms sales, trade, political cooperation and cultural ties. The objective of this paper is to analyze the role of international outsourcing in form of trading intermediate products on bilateral trade relations between Iran and China. As an empirical work, we h...
متن کامل