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Offshore Assembly From The United States: Production Characteristics Of The 9802 Program

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Author Info
Robert C. Feenstra
Gordon H. Hanson
Deborah L. Swenson

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Abstract

We study outsourcing from the United States under the offshore assembly program (OAP). Formerly called the 806/807 provision of the U.S. tariff code, and now renamed the 9802 provision of the Harmonized System code, this program allows U.S. firms to export component parts and have them assembled overseas. When the finished product is imported back into the United States, duties are paid only on the foreign value-added. We estimate the production characteristics of the U.S. OAP activity, and in particular, whether this activity is intensive in the use of non-production labor as compared to the overseas production. We also examine the sensitivity of OAP imports to real exchange rate movements.

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Paper provided by California Davis - Department of Economics in its series Department of Economics with number 98-10.

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Handle: RePEc:fth:caldec:98-10

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Postal: University of California Davis - Department of Economics. One Shields Ave., California 95616-8578
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  1. Sven W. Arndt, 1997. "Globalization and the Open Economy," Working Papers 9701, Lowe Institute of Political Economy. [Downloadable!]
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  2. Alan B. Krueger, 1997. "Labor Market Shifts and the Price Puzzle Revisited," NBER Working Papers 5924, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Krugman, Paul R & Venables, Anthony J, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 857-80, November. [Downloadable!] (restricted)
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  4. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-1), pages 327-377. [Downloadable!]
  5. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Papers 95-14, California Davis - Institute of Governmental Affairs.
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  6. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Sven W. Arndt, 1998. "Super-Specialization and the Gains from Trade," Working Papers 9801, Lowe Institute of Political Economy. [Downloadable!]
  8. Sven W. Arndt, 1998. "Super-Specialization And The Gains From Trade," Contemporary Economic Policy, Western Economic Association International, vol. 16(4), pages 480-485, October. [Downloadable!] (restricted)
  9. Jose Campa & Linda S. Goldberg, 1997. "The Evolving External Orientation of Manufacturing Industries: Evidence from Four Countries," NBER Working Papers 5919, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Werner Antweiler & Daniel Trefler, 2000. "Increasing Returns and All That: A View From Trade," NBER Working Papers 7941, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May. [Downloadable!] (restricted)
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  12. repec:fth:prinin:375 is not listed on IDEAS
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  1. Witada Anukoonwattaka, 2007. "Outsourcing and International Production of a Multinational: A Theoretical Model and Empirical Evidence from Toyota, Thailand," DEGIT Conference Papers c012_045, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  2. Eiichi Tomiura, 2004. "Foreign outsourcing and firm-level characteristics: evidence from Japanese manufacturers," Hi-Stat Discussion Paper Series d04-64, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
  3. Hoekman & Bernard & Winters, L. Alan, 2005. "Trade and employment : stylized facts and research findings," Policy Research Working Paper Series 3676, The World Bank. [Downloadable!]
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  4. Amador, João & Cabral, Sónia, 2008. "Vertical specialization across the world: a relative measure," MPRA Paper 9618, University Library of Munich, Germany. [Downloadable!]
  5. Don Clark, 2006. "Country and industry-level determinants of vertical specialization-based trade," International Economic Journal, Korean International Economic Association, vol. 20(2), pages 211-225, June. [Downloadable!] (restricted)
  6. Deborah L. Swenson, 2004. "Overseas Assembly and Country Sourcing Choices," NBER Working Papers 10697, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Alexander Hijzen & Holger Görg & Robert C. Hine, 2004. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Discussion Papers of DIW Berlin 437, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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  8. Swenson, Deborah, 2001. "Competition and the Location of Overseas Assembly," Working Papers 06-38, University of California at Davis, Department of Economics. [Downloadable!]
  9. Amador, João & Cabral, Sónia, 2008. "International fragmentation of production in the Portuguese economy: What do different measures tell us?," MPRA Paper 9783, University Library of Munich, Germany. [Downloadable!]
  10. Hiau Looi Kee, 2001. "Productivity versus endowments - a study of Singapore's sectoral growth, 1974-92," Policy Research Working Paper Series 2702, The World Bank. [Downloadable!]
  11. Maria Borga & William J. Zeile, 2004. "International Fragmentation of Production and the Intrafirm Trade of U.S. Multinational Companies," BEA Working Papers 0013, Bureau of Economic Analysis. [Downloadable!]
  12. Kurokawa, Yoshinori, 2006. "Skill Intensity Reversal and the Rising Skill Premium: Evidence from the U.S. and Mexico," MPRA Paper 14013, University Library of Munich, Germany. [Downloadable!]
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