publication . Preprint . 2012

Globalization, Credence Goods and International Civil Society

Krautheim, Sebastian; Verdier, Thierry;
Open Access
  • Published: 01 Nov 2012
Abstract
The process of globalization is characterized by an impressive growth in global value chains, as well as the proliferation of non-governmental organizations (NGOs) interacting with production and sourcing decisions of multinational firms. In this paper, we present a simple North-South model of international trade allowing for the joint emergence of firm offshoring to South and NGO activism financed by donations from the civil society. In our model northern consumers care about unobservable “credence” characteristics of goods such as the environmental and social impact of production. The analysis highlights a complementarity between the growth of global value cha...
Subjects
free text keywords: Globalization; Multinationals; NGOs; Regulation, jel:F23, jel:L31
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