Outsourcing and Trade in a Spatial World

This paper provides an analysis of outsourcing and trade in a spatial model a la Hotelling. In this setting, we discuss the trade-off between transport-cost-related disadvantages and outsourcing-induced production cost advantages of a large economy. The model gives a rich picture of possible trade and welfare effects of a movement towards free trade and points to the role of national transport costs for explaining these effects. Moreover, it gives economic insights in the countries' incentives to lower tariffs and to participate in free trade agreements with partner countries that differ in size and economic capacity

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Year of publication:	2005
Authors:	Egger, Hartmut ; Egger, Peter
Publisher:	[S.l.] : SSRN
Subject:	Outsourcing \| Theorie \| Theory \| Transportkosten \| Transport costs \| Internationale Wirtschaft \| International economy \| Komparativer Vorteil \| Comparative advantage \| Hotelling-Modell \| Hotelling model \| Standortwettbewerb \| Territorial competition

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