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 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2990.
Date of creation: 2010
Date of revision:
service offshoring; time zone differences; technological change; entrepreneurs; communication networks;
Other versions of this item:
- Kikuchi, Toru & Long, Ngo Van, 2010. "A simple model of service offshoring with time zone differences," The North American Journal of Economics and Finance, Elsevier, vol. 21(3), pages 217-227, December.
- 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ngo Van Long & Viet Do, 2007.
"International Outsourcing under Monopolistic Competition: Winners and Losers,"
Departmental Working Papers
2007-06, McGill University, Department of Economics.
- Viet Do & Ngo Van Long, 2007. "International Outsourcing under Monopolistic Competition: Winners and Losers," CESifo Working Paper Series 2034, CESifo Group Munich.
- Head, Charles Keith & Mayer, Thierry & Ries, John, 2007.
"How Remote is the Offshoring Threat?,"
CEPR Discussion Papers
6542, C.E.P.R. Discussion Papers.
- Marjit, Sugata, 2007. "Trade theory and the role of time zones," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 153-160.
- Kiminiori Matsuyama, 1994.
"Complementaries and Cumulative Processes In Models of Monopolistic Competition,"
1106, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kiminori Matsuyama, 1995. "Complementarities and Cumulative Processes in Models of Monopolistic Competition," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 701-729, June.
- Richard Freeman, 2002.
"The Labour Market in the New Information Economy,"
CEP Discussion Papers
dp0558, Centre for Economic Performance, LSE.
- Barbara Spencer, 2005.
"International outsourcing and incomplete contracts,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 38(4), pages 1107-1135, November.
- Barbara J. Spencer, 2005. "International Outsourcing and Incomplete Contracts," NBER Working Papers 11418, National Bureau of Economic Research, Inc.
- Freund, C.L. & Weinhold, D., 2002.
"The internet and international trade in services,"
Open Access publications from University College London
http://discovery.ucl.ac.u, University College London.
- Martin, Philippe & I.P. Ottaviano, Gianmarco, 1999.
"Growing locations: Industry location in a model of endogenous growth,"
European Economic Review,
Elsevier, vol. 43(2), pages 281-302, February.
- Martin, Philippe & Ottaviano, Gianmarco Ireo Paolo, 1996. "Growing Locations: Industry Location in a Model of Endogenous Growth," CEPR Discussion Papers 1523, C.E.P.R. Discussion Papers.
- David Hummels & Georg Schaur, 2012.
"Time as a Trade Barrier,"
NBER Working Papers
17758, National Bureau of Economic Research, Inc.
- Mary Amiti & Shang-Jin Wei, 2004.
"Fear of Service Outsourcing: Is It Justified?,"
NBER Working Papers
10808, National Bureau of Economic Research, Inc.
- James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977.
"Monopolistic Competition and Optimum Product Diversity,"
American Economic Review,
American Economic Association, vol. 67(3), pages 297-308, June.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
- Schmitt, Nicolas & Yu, Zhihao, 2001. "Economies of scale and the volume of intra-industry trade," Economics Letters, Elsevier, vol. 74(1), pages 127-132, December.
- Mitra, Devashish & Ranjan, Priya, 2007.
"Temporary Shocks and Offshoring: The Role of External Economies and Firm Heterogeneity,"
IZA Discussion Papers
2811, Institute for the Study of Labor (IZA).
- Mitra, Devashish & Ranjan, Priya, 2008. "Temporary shocks and offshoring: The role of external economies and firm heterogeneity," Journal of Development Economics, Elsevier, vol. 87(1), pages 76-84, August.
- Aoife Hanley & Ingrid Ott, 2009. "Web use and offshoring," Kiel Working Papers 1537, Kiel Institute for the World Economy.
- Kikuchi, Toru & Iwasa, Kazumichi, 2010.
"A simple model of service trade with time zone differences,"
International Review of Economics & Finance,
Elsevier, vol. 19(1), pages 75-80, January.
- Kikuchi, Toru & Iwasa, Kazumichi, 2008. "A Simple Model of Service Trade with Time Zone Differences," MPRA Paper 9574, University Library of Munich, Germany.
- Van Long, Ngo & Riezman, Raymond & Soubeyran, Antoine, 2005. "Fragmentation and services," The North American Journal of Economics and Finance, Elsevier, vol. 16(1), pages 137-152, March.
- Jones, Ronald & Kierzkowski, Henryk & Lurong, Chen, 2005. "What does evidence tell us about fragmentation and outsourcing?," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 305-316.
- Zhihao Yu, 2002. "Entrepreneurship and intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(2), pages 277-290, June.
- Toru Kikuchi, 2003. "Interconnectivity of communications networks and international trade," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 155-167, February.
- Robert C. Feenstra & Barbara J. Spencer, 2005. "Contractual Versus Generic Outsourcing: The Role of Proximity," NBER Working Papers 11885, National Bureau of Economic Research, Inc.
- Mary Amiti & Shang-Jin Wei, 2009. "Service Offshoring and Productivity: Evidence from the US," The World Economy, Wiley Blackwell, vol. 32(2), pages 203-220, 02.
- Mukherjee, Arijit & Suetrong, Kullapat, 2012. "Trade cost reduction and foreign direct investment," Economic Modelling, Elsevier, vol. 29(5), pages 1938-1945.
- Beladi, Hamid & Marjit, Sugata & Weiher, Kenneth, 2011. "An analysis of the demand for skill in a growing economy," Economic Modelling, Elsevier, vol. 28(4), pages 1471-1474, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.