A Simple Model of Offshore Outsourcing, Technology Upgrading and Welfare
Jung, Jaewon; Mercenier, Jean;
Publisher: HAL CCSD
Subject: Offshore outsourcing; Globalization; Skill upgrading, Technology upgrading; Firm heterogeneity | Technology upgrading | Offshore outsourcing | [SHS.ECO]Humanities and Social Sciences/Economics and Finance | Globalization | Firm heterogeneity | JEL: F - International Economics/F.F1 - Trade/F.F1.F16 - Trade and Labor Market Interactions | Offshore outsourcing,Globalization,Skill upgrading,Technology upgrading,Firm heterogeneity | Skill upgrading
We adapt Yeaple's (2005) heterogeneous agents framework to model firms in the North as making explicit offshore outsourcing decisions to cheap-labor economies. Globalization results from a lowering of the set-up costs incurred when engaging in offshore activities. We hi... View more
 Becker S.O., K. Ekholm and M. Muendler (2008), O¤shoring and the Onshore Composition of Occupations, Tasks and Skills, mimeo.
 Broda C. and D.E. Weinstein (2006), Globalization and the Gains from Variety, Quarterly Journal of Economics 121 (2), pp. 541-585.
 Conyon M.J., S. Girma, S. Thompson and P.W. Wright (2002), The Productivity and Wage E¤ects of Foreign Acquisition in the United Kingdom, Journal of Industrial Economics, 50 (1), pp. 85-102.
 Davidson C., S.J. Matusz and A. Shevchenko (2008), Globalization and Firm Level Adjustment with Imperfect Labor Markets, Journal of International Economics (forthcoming).
 Deardor¤ A.V. (2005), Gains from Trade and Fragmentation, mimeo, July.
 Deardor¤ A.V. (2006), Comment on Mankiw and Swagel, “The politics and economics of o¤shore outsourcing”, Journal of Monetary Economics 53 (5), pp. 1057-1061.
 Doms M.E. and J.B. Jensen (1998), Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United Sates, in R.E. Baldwin, R.E. Lipsey and J.D. Richardson, eds., Geography and ownership as bases for economic accounting, NBER Studies in Income and Wealth, Vol. 59, University of Chicago Press, 235-255.
 Feenstra R.C. and G.H. Hanson (1996), Foreign Investment, Outsourcing and Relative Wages, in R.C. Feenstra, G.M. Grossman and D.A. Irwin, eds., The Political Economy of Trade Policy: Papers in Honor of Jagdish Bhagwati, MIT Press, 89-127.
 Feenstra R.C. and G.H. Hanson (2003), Global Production Sharing and Rising Inequality: A Survey of Trade and Wages, in E.K. Choi and J. Harrigan, eds., Handbook of International Trade, Malden, MA: Blackwell, 146-185.
 Feenstra R.C. (2007), Globalization and Its Impact on Labor, presented at the Global Economy Lecture, Vienna Institute for International Economic Studies.