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We use Spanish firm-level data to test the hold-up model of global sourcing proposed by Antr s & Helpman (2004). We propose a novel representation of the model which guides us in bringing the theory to the data. We estimate a discrete choice model of firms' sourcing behavior, separately for the...
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The paper investigates the consequences of outsourcing of labor intensive activities to low-wage economies. This trend … markets are missing. The main results are: (i) outsourcing raises unemployment and labor income risk of unskilled workers; (ii …) it increases inequality among high- and low-income groups; and (iii) the gains from outsourcing can be made Pareto …
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Which firms find it optimal to integrate their input suppliers into the firm boundaries of control (vertical integration)? Which firms choose to expand their sourcing activities across the national border (offshoring)? This letter provides novel evidence on these questions based on a Spanish...
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