Offshoring
Subtitle: general equilibrium effects on wages, production and trade
By: Richard E. Baldwin and Frédéric Robert-Nicoud
Contributors: Robert-Nicoud, Frédéric; London School of Economics and Political Science. Centre for Economic Performance
Series: CEP discussion paper -- no. 794
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Published: 2007
Place of publication: London
Language: eng
Format: [electronic resource] :
Description: A simple model of offshoring is used to integrate the complex gallery of results that exist in the theoretical offshoring/fragmentation literature. The paper depicts offshoring as 'shadow migration' and shows that this allows straightforward derivation of the general equilibrium effects on prices, wages, production and trade (necessary and sufficient conditions are provided). We show that offshoring requires modification of the four HO theorems, so econometricians who ignore offshoring might reject the HO theorem when a properly specified version held in the data. We also show that offshoring is an independent source of comparative advantage and can lead to intra-industry trade in a Walrasian setting.
Notes: Title from publisher's abstract page (viewed on July 6, 2007).

"May 2007."

Includes bibliographical references.

Also available in print.

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