Recent contributions on offshoring often assume that firms can freely split their production process into separate … technologically determined sequence of production steps. In our model, cost savings from offshoring fluctuate along the production … from offshoring even if relocating individual steps would be advantageous in terms of offshoring costs, or they may …

In this paper, we develop a two-sector general equilibrium trade model which includes offshoring, sequential production … technological change affect equilibrium offshoring patterns. We show that, against common belief, a reduction in trade costs lowers … the range of tasks offshored even though the aggregate volume of offshoring may increase. …