) can offshore routine tasks to a low-wage host country. The most productive firms self-select into offshoring, and the … impact on welfare in the source country can be positive or negative, depending on the share of firms engaged in offshoring … among entrepreneurs is higher with offshoring than in autarky. All results hold in a model extension with firm-level rent …

This paper is a dynamic extension of the well-known theory of trade in tasks. In my model, a firm's offshoring decision … reduces the level of offshoring compared to a static optimization and that adjustment of offshoring volume with respect to … changes in offshoring costs or labor endowment is characterized by overshooting and subsequent movement toward a steady state …