We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities …, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in … an industry. Also, the initial advantage of a country as a potential host for outsourcing activities can create a lock in …

chapter compares the impact of international trade in intermediate inputs (offshoring) on wage inequality in two distinct but … similar frameworks. In the first framework the profitability of offshoring is based on increasing returns to scale on the task …-level, whereas the second framework relies on differences in relative factor endowments of the two countries involved in offshoring …

selling abroad. Because offshoring requires larger sunk costs than domestic sourcing, some firms decide to offshore only when … between the domestic and the foreign market are greater. In turn, offshoring firms sell greater volumes, display less …

integration)? Which firms choose to expand their sourcing activities across the national border (offshoring)? This letter provides … vertical integration and of offshoring tend to have been more productive ex ante than firms choosing not to do so. This finding …

increasing offshoring activity increases competition in the final goods market, leading to a progressive vertical disintegration … of the supply chains. Initially, the firms that decide to explore offshoring potential choose integration. As competition …

We set up a general equilibrium model, in which offshoring to a low-wage country can lead to job polarisation in the … pay wages that are positively linked to their profits by a rent-sharing mechanism. Offshoring involves fixed and task … variable offshoring costs. A reduction in those variable costs increases offshoring at the intensive and at the extensive …