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We express a doubt on the conventional wisdom namely, of a positive relationship between wage and productivity, of a formal sector firm in a developing economy where the firm can either go for subcontracting to the informal sector to minimize wage cost along with apprehension of extra-legal cost...
Persistent link: https://www.econbiz.de/10009363362
outsourcing due to the capital cost effect and the scale effect. We also unveil one source of productivity and formalize a link … the scale effect move against each other. Accordingly, the impacts of international trade on local outsourcing in export … intermediate goods encourages fragmentation and local outsourcing. …
Persistent link: https://www.econbiz.de/10008559019
We develop a monopolistically competitive model for a closed economy without contract incompleteness. We show that if superior technology is not allowed to be transferred, integration would be the best mode of organization given that the transaction cost of intermediate input is sufficiently...
Persistent link: https://www.econbiz.de/10008557274