We develop a theoretical framework to explain firms' offshoring decisions in the presence of uncertainty. This model … sharp prediction of the prevalence of offshoring in a given industry: The propensity of firms to source intermediate inputs … particularly pronounced in industries with higher volatility. Combining industry-level data on the U.S. offshoring intensity with …

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 …

Expanding on a general equilibrium model of offshoring, we analyze the effects of a unilateral emissions tax increase … effect: While the emissions intensity of incumbent non-offshoring firms declines, the cleanest firms start offshoring …. Moreover, offshoring firms become dirtier, induced by a reduction in the foreign effective emissions tax in general equilibrium …

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 …

multinationals, are less likely to rely on imported or internally provided services. -- international trade ; services ; off-shoring …