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This paper studies how firms' offshoring decisions shape a country's domestic production networks. We develop a model … foreign suppliers, due to costly communication. Triggered by foreign countries' export supply shocks, firms start offshoring … net effect of offshoring on a firm’s domestic production networks depends on the relative strength of the three effects …
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Understanding the drivers of international production fragmentation is an important issue for Latin American and Caribbean countries because participation in global production networks can help mitigate instability due to dependence on natural resources and can provide opportunities for further...
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