A simple model of service offshoring with time zone differences
AbstractWe propose a two-country monopolistic competition model of business service offshoring that captures the advantage conferred by time zone differences. We emphasize the role of the entrepreneurs, who decide how to produce business services (i.e., domestic service provision or service offshoring). It is shown that the utilization of communication networks induces a dramatic change in industrial structure due to entrepreneurial relocation (i.e., service offshoring) to take advantage of time zone differences. We show also show that in the presence of moving costs for entrepreneurs, technological improvements and the resulting increase in service offshoring may reduce a country's welfare.
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Bibliographic InfoArticle provided by Elsevier in its journal The North American Journal of Economics and Finance.
Volume (Year): 21 (2010)
Issue (Month): 3 (December)
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Web page: http://www.elsevier.com/locate/inca/620163
Service offshoring Time zone differences Technological change Entrepreneurs Communication networks;
Other versions of this item:
- Toru Kikuchi & Ngo Van Long, 2010. "A Simple Model of Service Offshoring with Time Zone Differences," CESifo Working Paper Series 2990, CESifo Group Munich.
- Toru Kikuchi & Ngo Van Long, 2009. "A Simple Model of Service Offshoring with Time Zone Differences," Discussion Papers 0916, Graduate School of Economics, Kobe University.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
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