DP8598 | Grossman-Hart (1986) Goes Global: Incomplete Contracts, Property Rights, and the International Organization of Production

Author(s)

Publication Date

01/10/2011

JEL Code(s)

Keyword(s)

Programme Area(s)

Abstract

I survey the influence of Grossman and Hart's (1986) seminal paper in the field of International Trade. I discuss the implementation of the theory in open-economy environments and its implications for the international organization of production and the structure of international trade flows. I also review empirical work suggestive of the empirical relevance of the property-rights theory. Along the way, I develop novel theoretical results and also outline some of the key limitations of existing contributions.