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A New Impetus for Endogenous Growth: R&D Offshoring via Virtual Labor Mobility

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  • Nakanishi, Noritsugu
  • Long, Ngo Van

Abstract

We develop a simple North-South model of quality ladders to show that the virtual mobility of labor across time zones, facilitated by the advance in communication technology, can raise the endogenous growth rate of the world economy. The unique balanced growth rate is increasing in the endowments of skilled labor in both countries and decreasing in the rate of impatience. Moreover, we find that partial R&D offshoring to the South has initially a negative effect on the level of skilled wages in the North, but this is compensated for by its positive effect on the growth rate in both North and South.

Suggested Citation

  • Nakanishi, Noritsugu & Long, Ngo Van, 2020. "A New Impetus for Endogenous Growth: R&D Offshoring via Virtual Labor Mobility," Discussion paper series HIAS-E-95, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
  • Handle: RePEc:hit:hiasdp:hias-e-95
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    3. Sugata Marjit, 2020. "A New Ricardian Model of Trade, Growth and Inequality," CESifo Working Paper Series 8689, CESifo.
    4. Sugata Marjit & Lei Yang, 2020. "An Elementary Theorem on Gains from Virtual Trade," Working Papers 2046, Indian Institute of Foreign Trade.
    5. Marjit, Sugata & Yang, Lei, 2020. "An Elementary Theorem on Gains from Virtual Trade," MPRA Paper 104088, University Library of Munich, Germany.

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    More about this item

    Keywords

    R&D offshoring; Virtual labor mobility; Time zone difference; Endogenous growth; North-South trade;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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