While there is a consensus in the literature that offshoring has a polarising effect on the skill structure of labour … demand, little is known about its impact on the capital side. In this paper, we analyse the effect of offshoring on the …, we document that offshoring reduces the relative demand for non-ICT capital, thereby also polarising the demand for …

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. Conversely, small variations in model parameters …