In this paper, we analyze the offshoring decision of firms whose production process is characterized by a particular sequence of steps. International cost differences vary non-monotonically along the production chain, and moving unfinished goods across borders incurs transport costs. We show...

This paper analyzes the influence of financial integration on institutional quality. We construct a dynamic political-economic model of an autocracy in which a ruling elite uses its political power to expropriate the general population. Although financial integration reduces capital costs for...

We adapt Yeaple's (2005) heterogeneous agent framework to model firms in the North as making explicit offshore outsourcing decisions to cheap-labor economies. We highlight how firms' technology transformations due to globalization will induce skill upgrading in the North, increase aggregate...

type="main" xml:id="ecin12108-abs-0001" There is now ample evidence that jobs and wages have been polarizing at the extremes of the skill distribution since the early 1990s. Possible explanations include, among others, routinization-biased technical change (technical progress substituting more...

Purpose The purpose of this paper is to theoretically examine the effects of outward FDI on domestic aggregate productivity and welfare. Design/methodology/approach This paper develops a North-South general equilibrium model in which firms' technology adoption and workers’ skill-technology...