This paper sets up a two-country model of offshoring with monopolistically competitive product and monopsonistically … competitive labour markets. In our model, an incentive for offshoring exists even between symmetric countries, because shifting … labour market power. However, offshoring between symmetric countries has negative welfare effects and therefore calls for …

offshoring. In this second-best world, a revenue-neutral decrease in the progressivity of the tax schedule promotes higher … redistribution to an increasing share of lower-wage workers. However, as the tax reform involves an increase in the offshoring …

gains from trade, or a (negative) terms of trade effect linked with the vanishing effect of distance on wages. This paper … offshoring in the short run and in the long run (when technology levels are endogenous). The short-run analysis shows that when … research efforts in response to increased offshoring. In particular, the rich country always gains from increased fragmentation …