Title: Outsourcing price decisions
Description: "This paper studies U.S.  overseas assembly imports to identify whether factors related to information or search costs appear to condition outsourcing decisions.  The data for 1991-2000 show that U.S. overseas assembly imports were characterized by incomplete pass-through of production and trade costs to import prices, though products assembled in more highly educated countries passed-through a much larger portion of their cost changes.  In addition, the price of outsourcing imports responded to competing suppliers' prices, with the largest responses occurring for products in capital-intense industries.  These differential price responses suggest that information issues play an important role in the mediation of outsourcing relationships"--National Bureau of Economic Research web site.
Subjects: Econometric models, Imports, Offshore assembly industry, Prices
Places: United States