A Theory of Just-in-Time and the Growth in Manufacturing Trade

Dalton, John (2013): A Theory of Just-in-Time and the Growth in Manufacturing Trade.

Abstract

This paper argues the widespread adoption of Just-in-Time (JIT) logistics provides a key to understanding the growth in the U.S. trade share. To do so, I develop a dynamic trade model based on the choice of the logistics technology used in a firm's supply chain. The model's predicted trade dynamics depend on how the set of firms using JIT with international suppliers changes over time. A numerical example shows the model is capable of generating growth in the trade share. I present evidence showing the theory is consistent with aggregate data as well as industry-level panel data.

• Item Type: MPRA Paper
• Language: English
• Keywords: trade growth, Just-in-Time, newsvendor problem, airplane transportation
• Subjects: F - International Economics > F1 - Trade > F10 - General; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M11 - Production Management

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