This study analyzes the effects of increased trade with China and Eastern Europe on manufacturing employment in 1,146 NUTS-3 regions of 17 Western European countries from 1991 to 2011. Building on Autor et al. (2013) we aim at identifying the causal effects of an increase in import and export...

We present a model, in which a small industrialised economy outsources part of its production into a small foreign country which is well endowed with low-skilled labour. We analyse under which conditions sinking trade costs stimulate outsourcing activities, thereby increasing the wage dispersion...