We construct a model to show that outsourcing of a crucial input can occur even though it can be produced in-house at a … differentiation is small or the technological gap between two input producing firms is small, strategic outsourcing will occur …. Technology transfer in the form of patent sale will act as a commitment that the firm will outsource. While the outsourcing firm …

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. …