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Offshoring: Why Do Stories Differ?

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  • Wilhelm Kohler
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    Abstract

    This paper identifies critical modeling choices, as well as differences in the driving forces behind offshoring, that may explain differences in results. Offshoring of industry-specific tasks has wage and employment effects that are vastly different from those identified in Grossman & Rossi-Hansberg (2006), depending on how the industries differ in their average and marginal skill-intensities, respectively. Structural adjustment may occur at the intensive margin and the extensive margin (offshoring), and it may occur in opposite directions or the same direction at both margins, again depending on how industries differ in terms of their average and marginal skill-intensity.

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    File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2008/wp-cesifo-2008-02/cesifo1_wp2232.pdf
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    Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2232.

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    Date of creation: 2008
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    Handle: RePEc:ces:ceswps:_2232

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    1. Ronald W. Jones, 2000. "Globalization and the Theory of Input Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 026210086x, December.
    2. James Markusen, 2005. "Modeling the Offshoring of White-Collar Services: From Comparative Advantage to the New Theories of Trade and FDI," NBER Working Papers 11827, National Bureau of Economic Research, Inc.
    3. Sourafel Girma & Holger Görg, 2004. "Outsourcing, Foreign Ownership, and Productivity: Evidence from UK Establishment-level Data," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 817-832, November.
    4. Catherine L. Mann & Jacob Funk Kirkegaard, 2006. "Accelerating the Globalization of America: The Role for Information Technology," Peterson Institute Press: All Books, Peterson Institute for International Economics, Peterson Institute for International Economics, number 3900, July.
    5. Avinash K. Dixit & Gene M. Grossman, 1981. "Trade and Protection with Multistage Production," NBER Working Papers 0794, National Bureau of Economic Research, Inc.
    6. Jagdish Bhagwati & Arvind Panagariya, 2004. "The Muddles over Outsourcing," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 93-114, Fall.
    7. Gene M. Grossman & Elhanan Helpman, 2002. "Integration Versus Outsourcing In Industry Equilibrium," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 117(1), pages 85-120, February.
    8. Jones, Ronald W. & Kierzkowski, Henryk, 2005. "International fragmentation and the new economic geography," The North American Journal of Economics and Finance, Elsevier, Elsevier, vol. 16(1), pages 1-10, March.
    9. Arndt, Sven W. & Kierzkowski, Henryk (ed.), 2001. "Fragmentation: New Production Patterns in the World Economy," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199243310, October.
    10. Catherine L. Mann, 2003. "Globalization of IT Services and White Collar Jobs: The Next Wave of Productivity Growth," Policy Briefs PB03-11, Peterson Institute for International Economics.
    11. Mary Amiti & Shang-Jin Wei, 2005. "Service offshoring, Productivity, and Employment," IMF Working Papers 05/238, International Monetary Fund.
    12. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1980. "Heckscher- Ohlin Trade Theory with a Continuum of Goods," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 95(2), pages 203-24, September.
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