Vertical Integration or Disintegration? A Bargaining Model of the Maquiladora's Case

In this paper we present an analytical framework to study the demands of foreign and domestic factors of production of the maquiladora industry. We derive the net profitability of demanding high in72 9 Vol. 21 ¿ número 41 ¿ 2012 stead of low quality inputs. We argue that differences in the quality o...

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Detalles Bibliográficos
Autores principales: Ikuho Kochi, Ramsés Jiménez Castañeda, Raúl Alberto Ponce Rodríguez
Formato: Artículo científico
Publicado: Instituto de Ciencias Sociales y Administración 2012
Materias:
Sociología
Vertical integration
bargaining theory
firm behavior
Acceso en línea:http://www.redalyc.org/articulo.oa?id=85923409005
http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=mx/mx-044&d=85923409005oai
Aporte de:
Red de Bibliotecas Virtuales de Ciencias Sociales (CLACSO) de Consejo Latinoamericano de Ciencias Sociales
id I16-R122-85923409005oai
record_format dspace
institution Consejo Latinoamericano de Ciencias Sociales
institution_str I-16
repository_str R-122
collection Red de Bibliotecas Virtuales de Ciencias Sociales (CLACSO)
topic Sociología
Vertical integration
bargaining theory
firm behavior
spellingShingle Sociología
Vertical integration
bargaining theory
firm behavior
Ikuho Kochi
Ramsés Jiménez Castañeda
Raúl Alberto Ponce Rodríguez
Vertical Integration or Disintegration? A Bargaining Model of the Maquiladora's Case
topic_facet Sociología
Vertical integration
bargaining theory
firm behavior
description In this paper we present an analytical framework to study the demands of foreign and domestic factors of production of the maquiladora industry. We derive the net profitability of demanding high in72 9 Vol. 21 ¿ número 41 ¿ 2012 stead of low quality inputs. We argue that differences in the quality of inputs between foreign and domestic factors can explain the low vertical integration of the maquiladora with the Mexican industry. We show that if the difference in quality and its positive effect in marginal production compensates the difference in prices, then the maquiladora can be induced to integrate vertically with foreign suppliers of inputs, even if the unitary cost to demand foreign inputs is strictly higher than that of domestic inputs. We also show that a depreciation of the Mexican exchange rate does not necessarily increase the maquiladora's demand of Mexican inputs. This explains recent empirical evidence showing this phenomenon. Conversely, a depreciation of the exchange rate might increase the maquiladora's demand of imported inputs if foreign and domestic factors are complementary. The above holds even if the domestic supplier participates in a bargaining game offering an efficient contract.
format Artículo científico
Artículo científico
author Ikuho Kochi
Ramsés Jiménez Castañeda
Raúl Alberto Ponce Rodríguez
author_facet Ikuho Kochi
Ramsés Jiménez Castañeda
Raúl Alberto Ponce Rodríguez
author_sort Ikuho Kochi
title Vertical Integration or Disintegration? A Bargaining Model of the Maquiladora's Case
title_short Vertical Integration or Disintegration? A Bargaining Model of the Maquiladora's Case
title_full Vertical Integration or Disintegration? A Bargaining Model of the Maquiladora's Case
title_fullStr Vertical Integration or Disintegration? A Bargaining Model of the Maquiladora's Case
title_full_unstemmed Vertical Integration or Disintegration? A Bargaining Model of the Maquiladora's Case
title_sort vertical integration or disintegration? a bargaining model of the maquiladora's case
publisher Instituto de Ciencias Sociales y Administración
publishDate 2012
url http://www.redalyc.org/articulo.oa?id=85923409005
http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=mx/mx-044&d=85923409005oai
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AT raulalbertoponcerodriguez verticalintegrationordisintegrationabargainingmodelofthemaquiladorascase
bdutipo_str Repositorios
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