We construct a model of offshoring with externalities and firm heterogeneity. Due to thepresence of externalities …, temporary shocks like the Y2K problem can have permanenteffects, i.e., they can permanently raise the extent of offshoring in an … industry. Also, the initialadvantage of a country as a potential host for outsourcing activities can create a lock ineffect …

Barriers to outsourcing that are being currently implemented in the US effectively tax its companies who "export" jobs … through outsourcing. The objective is to raise domestic employment. Given that many of the important international markets … oligopolistic context. We find that while an outsourcing tax favors domestic workers by causing firms to switch to a greater use of …

We provide a comprehensive empirical analysis of the links between international services outsourcing, domestic … outsourcing, profits and innovation using plant level data. We find a positive effect of international outsourcing of services on … innovative activity at the plant level. Such a positive effect can also be observed for domestic outsourcing of services, but the …