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 …

of tasks. Two main channels of offshoring tasks are taken into account: offshore outsourcing and in-house offshoring. The … offshoring channel. Offshore outsourcing of R&D has a positive effect on the anticipated domestic employment, whereas in …-house offshoring of R&D has a negative effect. Specific for the manufacturing sector is that offshore outsourcing of production also …

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 …

This paper sets up a two-country model of offshoring with monopolistically competitive product and monopsonistically … competitive labour markets. In our model, an incentive for offshoring exists even between symmetric countries, because shifting … labour market power. However, offshoring between symmetric countries has negative welfare effects and therefore calls for …

the intermediate from vertically integrated producers, or from independent suppliers. In both cases, offshoring part of …

firms that are consistent with stylized facts from the recent empirical literature. -- multinational firms ; outsourcing … ; intra-firm trade ; offshoring ; vertical FDI …