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We use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolistic competition model of the materials sourcing decisions of heterogeneous...
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reshoring or offshoring. When the demand elasticity rises with price, two policy instruments generally are needed to achieve …
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be performed at home or abroad, but offshoring entails costs that vary by task. In equilibrium, the tasks with the … highest offshoring costs may not be traded. Among the remainder, those with the relatively higher offshoring costs are …
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tradable tasks and use it to study how falling costs of offshoring affect factor prices in the source country. We identify a …
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-based explanation by focussing on international outsourcing. In a recent paper, Feenstra and Hanson (1996) estimate the effect of … international outsourcing on wage inequality in the US. This paper extends the FH approach using more detailed definitions of import … penetration and outsourcing as well as data for UK manufacturing industries for the period 1982-1996. The econometric results …
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