Three essays on the consequences of offshore outsourcing

We consider some of the implications of offshoring, whereby firms outsource the production of intermediate inputs abroad. We first build a model of trade in tasks. Global production disintegration arises because the tasks in which the wage gap more than offsets the offshoring costs are relocated abroad. Labor demand effects in the offshoring country's manufacturing sector depend on the interaction of trade and offshoring costs. In a three-countries extension, we show that offshoring has race-to-the-bottom effects. We then proceed to an empirical test of the main implications of the model. "Cheap" labor abroad has a relatively low effect on labor demand in countries where labor is relatively expensive; offshoring is mildly associated with firm-level employment and positively associated with firm entry. The final chapter studies optimal competition policy under offshorin, finding that globalization may create incentives to coordinate competition in product markets between Northern ans Southern countries

Publication infos:
Genève, Institut de hautes études internationales et du développement, 2009
Publication year:
Number of pages:
155 p.
PhD Director(s):
Directeur de thèse: Professeur Richard Baldwin
Call number:

 Record created 2011-06-03, last modified 2019-09-30

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