Marjit, Sugata; Mukherjee, Arijit - In: The Journal of International Trade & Economic Development 17 (2008) 1, pp. 21-35
Recent empirical evidence shows a negative relationship between international outsourcing and profitability. This paper provides a theoretical explanation for this phenomenon. We show that, in an oligopolistic market, firms earn lower profits in the outsourcing equilibrium compared to the...