This paper analyzes a North-South trade model with costly offshoring and equilibrium unemployment due to union wage … setting. Reductions in the amount of resources required in the offshoring process usually decrease employment, though the … opposite can happen at a low initial level of offshoring activity. If additional offshoring leads to a fall in the scale of …

We study the short- and long-run implications of offshoring on innovation, technology adoption, wage and income …-abundant West to a skill-scarce East. Profit maximization determines both the extent of offshoring and technological progress …. offshoring induces technical change with an ambiguous factor bias. When the initial level of offshoring is low, an increase in …