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 …

We assess the impact of geopolitical risk and world uncertainty on the sovereign debt risk of 26 European Economies … European country's sovereign risk as measured by 5- and 10-year Credit Default Swaps (CDS) and bond returns. Moreover, this …

study uses a comprehensive approach to assess the impact of rising geopolitical risk on sovereign debt holdings for a panel … investor's portfolios. Our results allow us to conclude that while domestic economic agents display clearer risk aversion …, foreign economic agents have a more risk-taking behaviour in what concerns the financial investment on government debt. …

We provide benchmarks to evaluate what is an optimal foreign debt and a maximal foreign debt (debt-max), when risk is … capital. We consider two sets of high- risk countries during the period 1978-99: a subset of 21 countries that defaulted on … default risk, and add another dimension to the literature of early warning signals of default/credit risk. …

How do banks respond to geopolitical risk, and is this response distinct from other macroeconomic risks? Using U ….S. supervisory data and new geopolitical risk indices, we show that banks reduce cross-border lending to countries with elevated … geopolitical risk but continue lending to those markets through foreign affiliates - unlike their response to other macro risks …

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 …

We set up a general equilibrium model, in which offshoring to a low-wage country can lead to job polarisation in the … pay wages that are positively linked to their profits by a rent-sharing mechanism. Offshoring involves fixed and task … variable offshoring costs. A reduction in those variable costs increases offshoring at the intensive and at the extensive …

In this paper we explore the role that demand uncertainty plays for the offshoring decision, and the role that … offshoring plays for domestic volatility of employment. Offshoring is modeled as in Antràs & Helpman (2004), but we assume … firm's employment decision in its domestic and offshore production. In this environment, offshoring is driven by …