We present a dynamic model where the probability of outsourcing production is increasing in the firm’s expectation of … outsourcing. No prior study has been able to provide such causal evidence. Our results are robust to the inclusion of detailed … characteristics of the firms as well as firm fixed effects. -- Outsourcing ; technological change …

This paper studies the impact of outsourcing on individual wages. In contrast to the standard approach in the … literature, we focus on domestic outsourcing as well as foreign outsourcing. By using a simple theoretical model, we argue that …, if outsourcing is associated with specialization gains arising from an increase in the division of labor, domestic …

influence the demand for outsourcing. We show that outsourcing becomes more beneficial to the firm when technology is changing … expensive than outsourcing. The model therefore provides an explanation for the recent increases in outsourcing that have taken … model, namely, that all other things equal, the demand for outsourcing increases with the probability of technological …