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Digital Library of the
European Council for Modelling and Simulation |
Title: |
An Agent Based Model Of Firms Selling And Sourcing International
Decisions With Flexibility To Demand And Supply Shocks |
Authors: |
Ermanno Catullo |
Published in: |
(2012).ECMS
2012 Proceedings edited by: K. G. Troitzsch, M. Moehring, U. Lotzmann. European
Council for Modeling and Simulation. doi:10.7148/2012 ISBN:
978-0-9564944-4-3 26th
European Conference on Modelling and Simulation, Shaping reality through simulation Koblenz,
Germany, May 29 – June 1 2012 |
Citation
format: |
Catullo, E. (2012). An Agent Based Model
Of Firms Selling And Sourcing International Decisions With Flexibility To
Demand And Supply Shocks. ECMS 2012 Proceedings edited by: K. G. Troitzsch, M. Moehring, U. Lotzmann (pp. 16-22).
European Council for Modeling and Simulation. doi:10.7148/2012-0016-0022 |
DOI: |
http://dx.doi.org/10.7148/2012-0016-0022 |
Abstract: |
The
increasingly global fragmentation of production is a central topic of the
international trade economics re- search agenda. The agent based model
presented in this paper tries to combine in a unique coherent schema two
usually distinct fields of internationalization analy-
sis: from one side firms’ selling decisions (i.e.,
the choice to export or to invest directly abroad) and from the other side
firms’ sourcing decisions (i.e., the choice to out- source or to produce
directly intermediate goods). There- fore, assuming the presence of fixed and
variable costs to export and to import, the model is able to reproduce both
the exporters and importers firm better performance empirical evidence.
Moreover, assuming that production flexibility to shocks is higher with lower
capital intensity and it increases when firms outsource
their intermediate goods, the model replicates the positive empirical rela- tionship between sectoral capital intensity and imports of intermediate
goods from foreign affiliates. The simulta- neous study of selling and sourcing decisions might offer
useful tools to understand economic processes and gives the opportunity to
test the effects of different combina- tions of trade and industrial policy measures on interna- tional division of
labor and welfare. |
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