ABSTRACT
The model proposed by Antràs and Chor in 2013 predicted that the effect of upstreamness on the global outsourcing tendency of headquarters within global value chain differs qualitatively depending on the demand elasticity. Using data of Chinese processing exports at product level, this study empirically verifies this theoretical prediction through supportive evidence using data from a developing country.
Highlights
We examine the effect of upstreamness on headquarters’ global outsourcing tendency.
For this, we consider differences in demand elasticity.
We use processing trade data at the product level from China, a developing country.
The study uniquely verifies Antràs and Chor’s (Citation2013) prediction.
Disclosure statement
No potential conflict of interest was reported by the author.
Supplementary material
Supplemental data for this article can be accessed here.
Notes
1 Although the framework of AC2013 also has implications as well for domestic outsourcing decisions, we focus here on the global outsourcing problem as the data on domestic transactions are still scant to the best of our knowledge.
2 The CCTS considers three types of domestically owned enterprises: state owned, collectively owned, and privately owned.
3 is the median demand elasticity calculated as the trade-weighted average elasticity of its constituent HS10 products.