-South theoretical framework, I show that higher Northern tariffs reduce the incentives for outsourcing and offshoring, while higher … Southern tariffs have the opposite effects. I also show that increased offshoring and outsourcing imply an increase in the …

This paper studies how firms' offshoring decisions shape a country's domestic production networks. We develop a model … foreign suppliers, due to costly communication. Triggered by foreign countries' export supply shocks, firms start offshoring … net effect of offshoring on a firm’s domestic production networks depends on the relative strength of the three effects …