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Chapter 4 Outsourcing and Import Restriction Policies

In: Globalization and Emerging Issues in Trade Theory and Policy

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  • Kai-Hsi Chu
  • Kar-yiu Wong

Abstract

Purpose – The purpose of this chapter is to examine the issues of outsourcing and corresponding policy interventions by the government. Design/methodology/approach – This chapter begins with a situation in which no government interventions are allowed, and examine the government of the North, when it is allowed to intervene, can choose one of the three options: (a) to limit the quantity of each type of variety of the foreign intermediate inputs to be imported; (b) to limit the number of varieties of the foreign intermediate inputs to be imported; and (c) to impose a tariff on the imported intermediate inputs. Findings – For each policy, the optimal intervention is derived. Originality/value – The analysis can be used to examine the argument for restricting outsourcing.

Suggested Citation

  • Kai-Hsi Chu & Kar-yiu Wong, 2008. "Chapter 4 Outsourcing and Import Restriction Policies," Frontiers of Economics and Globalization, in: Globalization and Emerging Issues in Trade Theory and Policy, pages 37-55, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:fegzzz:s1574-8715(08)05004-5
    DOI: 10.1016/S1574-8715(08)05004-5
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