International Outsourcing and Incomplete Contracts
AbstractInternational outsourcing to lower cost countries such as China and India can best be understood through the enrichment of trade models to include concepts from industrial organization and contract theory that explain the vertical organization of production. The combination of trade with the choice of organizational form represents an important new area for both theoretical and empirical research. This survey paper provides a perspective on this new literature so as to gain insights into the forces driving international outsourcing. The paper focuses on relationship-specific investment, incomplete contracts, and also search and matching, as fundamental concepts that explain outsourcing decisions.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11418.
Date of creation: Jun 2005
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Other versions of this item:
- Barbara Spencer, 2005. "International outsourcing and incomplete contracts," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1107-1135, November.
- F1 - International Economics - - Trade
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-27 (All new papers)
- NEP-BEC-2005-06-27 (Business Economics)
- NEP-INT-2005-06-27 (International Trade)
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- Caballero, R-J & Hammour, M-L, 1996.
"The Macroeconomics of Specificity,"
96-25, Massachusetts Institute of Technology (MIT), Department of Economics.
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