We explore the relationship between proximity of buyers and sellers and the organizational form of outsourcing …. Outsourcing can be "contractual" in which suppliers undertake specific investments or involve "generic" market transactions …

integration of commodity markets (i.e., free trade) and international integration of factor markets (i.e., offshoring). In a two …-country, two-good, two-factor model we show that free trade and offshoring have opposite effects on rich-country workers. Free … trade hurts rich-country workers, while reducing the volatility of their wages; by contrast, offshoring benefits them, while …

not accounted for by differences in workers' characteristics, occupations, nor for differences in the employers' locations …