We present a model which considers both regulatory burden of offshoring barriers and possible terms of trade gains from … offshoring tax. Otherwise, free trade is optimal. Welfare reductions from an offshoring tax are more likely with several … developed nations engaging in offshoring. We derive and characterize the Nash equilibrium in such a case …

We develop an endogenous growth model to study the long run consequences of offshoring with firm heterogeneity and … incomplete contracts. In so doing, we model offshoring as the geographical fragmentation of a firm's production chain between a … possibility of offshoring has favorable implications for economic growth. Yet, offshoring induced by a higher bargaining power of …

economy has become highly integrated, and foreign outsourcing has become a standard practice for firms. While trade theory … production process abroad. Advances in globalization entail lower tariff rates of outsourcing. Contrary to the common wisdom, we …

This paper analyzes a sequential game where firms decide about outsourcing the production of a non-specific input good … Tirole (1984) to characterize the different equilibria. We find that outsourcing generally softens competition in the final … product market. If firms anticipate the impact of their outsourcing decisions on input prices, there may be equilibria where …