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Outsourcing and Trade in a Spatial World

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  • Hartmut Egger
  • Peter Egger

Abstract

This paper provides an analysis of outsourcing and trade in a spatial model à la Hotelling. In this setting, we discuss the trade-off between transport-cost-related disadvantages and outsourcing-induced production cost advantages of a large economy. The model gives a rich picture of possible trade and welfare effects of a movement towards free trade and points to the role of national transport costs for explaining these effects. Moreover, it gives economic insights in the countries’ incentives to lower tariffs and to participate in free trade agreements with partner countries that differ in size and economic capacity.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2004/wp-cesifo-2004-12/cesifo1_wp1349.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1349.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1349

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Keywords: international outsourcing; international trade; spatial competition;

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References

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Citations

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Cited by:
  1. Pierre M. Picard & David E. Wildasin, 2009. "Labor Market Pooling, Outsourcing and Labor Contracts," CESifo Working Paper Series 2765, CESifo Group Munich.
  2. Pedro Albarran & Raquel Carrasco & Adelheid Holl, 2013. "Domestic transport infrastructure and firms’ export market participation," Small Business Economics, Springer, Springer, vol. 40(4), pages 879-898, May.
  3. Philipp Harms & Oliver Lorz & Dieter Urban, 2009. "Offshoring Along the Production Chain," Working Papers 09.01, Swiss National Bank, Study Center Gerzensee.
  4. Picard, Pierre M. & Wildasin, David E., 2011. "Outsourcing, labor market pooling, and labor contracts," Journal of Urban Economics, Elsevier, vol. 70(1), pages 47-60, July.
  5. G. F. Gori & L. Lambertini, 2012. "Trade liberalisation between Asymmetric Countries with Environmentally Concerned Consumers," Working Papers wp824, Dipartimento Scienze Economiche, Universita' di Bologna.
  6. Kevin Wiseman, 2010. "Location, Productivity, and Trade," 2010 Meeting Papers, Society for Economic Dynamics 671, Society for Economic Dynamics.
  7. Baldwin, Richard & Taglioni, Daria, 2011. "Gravity chains: estimating bilateral trade flows when parts and components trade is important," Working Paper Series, European Central Bank 1401, European Central Bank.
  8. Thomas Fuchs, 2005. "Industry Structure and Productivity Growth: Panel Data Evidence for Germany from 1971–2000," Ifo Working Paper Series Ifo Working Paper No. 24, Ifo Institute for Economic Research at the University of Munich.
  9. Egger, Hartmut & Egger, Peter, 2010. "The trade and welfare effects of mergers in space," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 40(4), pages 210-220, July.
  10. Michael Hübler, 2007. "A Simple Model of Outsourcing with Cournot Competition," Kiel Working Papers 1320, Kiel Institute for the World Economy.

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