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- W3048783491 abstract "This paper develops a general equilibrium model of international trade in homogeneous intermediate inputs. In the model, trade between countries is driven exclusively by uncertainty in the delivery of inputs. Because their managers are risk-averse, final good firms contract with multiple suppliers located in different countries in an attempt to decrease the variability of their profits. The analysis shows that risk diversification provides an incentive for international trade over and above such reasons as comparative advantages (emphasized in classical models of international trade) and economies of scale (emphasized in new trade models), and highlights a new channel – a reduction in uncertainty – through which trade liberalization increases welfare." @default.
- W3048783491 created "2020-08-18" @default.
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- W3048783491 date "2020-01-01" @default.
- W3048783491 modified "2023-09-23" @default.
- W3048783491 title "Global Sourcing under Uncertainty" @default.
- W3048783491 doi "https://doi.org/10.2139/ssrn.3668419" @default.
- W3048783491 hasPublicationYear "2020" @default.
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