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A Complete Characterization of the Distributional Effects of International Outsourcing in the Heckscher-Ohlin Model

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  • Hartmut Egger
  • Josef Falkinger

Abstract

This paper determines the distributional effects of international outsourcing in a two sector Heckscher-Ohlin type model. It is shown that the factor-biased and the sector-biased impact of international outsourcing discussed in the literature can be seen as special cases of the more general characterization presented in this paper. Concerning the welfare implications of international outsourcing, the main finding is that a Pareto-improvement cannot be excluded from a theoretical point of view.

Suggested Citation

  • Hartmut Egger & Josef Falkinger, 2001. "A Complete Characterization of the Distributional Effects of International Outsourcing in the Heckscher-Ohlin Model," CESifo Working Paper Series 573, CESifo.
    • Handle: RePEc:ces:ceswps:_573
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    References listed on IDEAS

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    1. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-245, May.
    2. Kohler, Wilhelm, 2001. "A specific-factors view on outsourcing," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 31-53, March.
    3. Arndt, Sven W., 1997. "Globalization and the open economy," The North American Journal of Economics and Finance, Elsevier, vol. 8(1), pages 71-79.
    4. Hartmut Egger & Peter Egger, 2001. "Cross Border Outsourcing: A General Equilibrium Perspective and Evidence for Outward Processing in EU Manufacturing," WIFO Working Papers 139, WIFO.
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    Cited by:

    1. Richard Frensch & Jan Hanousek & Evžen Kocenda, 2012. "Incomplete specialization and offshoring across Europe," FIW Working Paper series 091, FIW.
    2. Lo Turco, Alessia & Maggioni, Daniela & Picchio, Matteo, 2013. "Offshoring and job stability: Evidence from Italian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 27-46.
    3. Chiara BROCCOLINI & Alessia LO TURCO & Andrea PRESBITERO & Stefano STAFFOLANI, 2007. "International Outsourcing vs. ICT in explaining the wage gap in Italian Manufacturing," Working Papers 299, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    4. Hartmut Egger & Peter Egger, 2002. "How international outsourcing drives up Eastern European wages," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 83-96, March.
    5. Richard Frensch, 2010. "European trade in parts and components : searching (for a trade model for searching) for offshoring evidence," Working Papers 280, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    6. Carmen Díaz Mora & Rosario Gandoy Juste, "undated". "Estrategias de fragmentación de la producción: Una realidad en la industria espanola?," Studies on the Spanish Economy 180, FEDEA.
    7. Egger, Hartmut & Egger, Peter, 2001. "Cross-border sourcing and outward processing in EU manufacturing," The North American Journal of Economics and Finance, Elsevier, vol. 12(3), pages 243-256, November.

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