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 countryfs welfare.
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Bibliographic InfoPaper provided by Graduate School of Economics, Kobe University in its series Discussion Papers with number 0916.
Date of creation: Nov 2009
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, 2010. "A Simple Model of Service Offshoring with Time Zone Differences," CESifo Working Paper Series 2990, CESifo Group Munich.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-11 (All new papers)
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