theoretical explanation for this phenomenon. In an oligopoly model, we show that firms earn lower profits in the outsourcing …Recent empirical evidences show negative relationship between outsourcing and profitability. This paper provides a … equilibrium compared to the situation where neither firm does outsourcing, and it holds irrespective of the intensity of …

We show that international outsourcing may reduce welfare of the outsourcing country by deterring market-entry, thus … showing a new effect which is different from the employment and the quality effects creating negative impacts of outsourcing …. Entry deterrence under outsourcing reduces domestic welfare if both the profit extraction and cost saving from outsourcing …

This paper considers the effect of outsourcing on R&D of the contracting firm. We show that outsourcing increases … (decreases) R&D investment in a declining (booming) industry. If outsourcing reduces potential R&D investment, it may also make … the consumers worse off. We show that outsourcing raises R&D effort in more competitive product markets. If outsourcing …