This paper sets up a two-country model of offshoring with monopolistically competitive product and monopsonistically … competitive labour markets. In our model, an incentive for offshoring exists even between symmetric countries, because shifting … labour market power. However, offshoring between symmetric countries has negative welfare effects and therefore calls for …

Recent empirical studies have been searching for evidence on and driving forces for offshoring. Frequently, this has … competing with the role of multilateral trade resistance. Our results support evidence for offshoring activities across Europe … rest of the world. -- international trade ; gravity model ; offshoring ; panel data ; European Union …