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 develop a theoretical framework to explain firms' offshoring decisions in the presence of uncertainty. This model … sharp prediction of the prevalence of offshoring in a given industry: The propensity of firms to source intermediate inputs … particularly pronounced in industries with higher volatility. Combining industry-level data on the U.S. offshoring intensity with …