Essays on Bilateral Vertical Specialization, Reversed Fragmentation, Reshoring, and R&D Productivity

The focus of the first essay is on, examining the effect of free trade agreements on the growth of bilateral vertical specialization in manufacturing between the U.S. and its trading partners, before and after the agreements were signed. Bilateral production sharing is modeled using input-output analysis. The goal to broaden market access through the elimination of tariffs on most of the manufactured goods between free trade agreements countries has produced mixed results, at least, in the manufacturing sector. Since the various free trade agreements involving the U.S. have taken effect, tariff reductions on manufactured goods have not been uniform in bringing a substantial increase in total bilateral vertical specialization levels with countries in Central and Southern America, Africa, and the Middle East. North American countries are by far the most significant trade partner with the U.S. Asian and Oceanic countries have increasing levels of bilateral vertical specialization with the U.S. Despite growing over time, bilateral vertical specialization levels are relatively small for most of the Central/South American countries, as well for countries in Africa and the Middle East.;The second essay is an investigation of a case where the traditional dynamics of industrial fragmentation are reversed. Rather than having production of a good split into distinct stages carried out in different locations, it may be possible that a technological advancement or managerial breakthrough could induce a firm to combine previously fragmented stages back into one. Depending on whether this new process is performed at home or abroad. A general equilibrium framework is used by following the Heckscher-Ohlin model with two countries and two factors of production. The results show that the specific factor intensities of the original fragments, the new combined fragment, and the other final good play a major role in determining which one of the two scenarios is most likely.;The third essay is a study of firm size and location in the context of R&D productivity in the U.S. In this essay, the focus is on refining the threshold by which firm sizes are defined in the U.S. manufacturing sector, as well as an examination of whether location by U.S. region plays a role in enhancing R&D productivity. System Generalized Method of Moments, and the augmented Olley and Pakes estimator (Olley and Pakes, 1996; Buettner, 2004) are used to compare R&D productivity for firms of different sizes, as well as for firms of different U.S. geographical regions. The results show that large firms consistently have a relatively higher R&D productivity than small and medium-sized firms. However, the results for location in terms of R&D productivity of a firm are mixed.