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Financial Advantage, Outsourcing and FDI under Wage Uncertainty

Listed author(s):
  • Choi, Jai Young
  • Choi, E Kwan

This paper investigates the role of infrastructure aid to developing countries in a 3x2 model with two traded goods and a nontraded good, with the focus of analysis placed on the effects on real national income and the Dutch disease effect. It is shown that for a recipient country, infrastructure aid to the traded good sectors is necessarily welfare-enhancing but infrastructure aid to the nontraded sector is welfare-neutral. Output effects of infrastructure aid depend on factor substitution, relative factor-saving effect, and the output response of the nontraded good. The effects on factor and nontraded good prices are also analyzed.

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File URL: http://www2.econ.iastate.edu/papers/p17376-2013-01-01.pdf
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers Archive with number 37376.

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Date of creation: 01 Jan 2013
Publication status: Published in North American Journal of Economics and Finance, January 2013, vol. 24 no. 1, pp. 260-267
Handle: RePEc:isu:genres:37376
Contact details of provider: Postal:
Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070

Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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  1. Wilhelm Kohler, 2004. "International outsourcing and factor prices with multistage production," Economic Journal, Royal Economic Society, vol. 114(494), pages 166-185, March.
  2. 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.
  3. Ravi Batra & Hamid Beladi, 2010. "A Simple Two-Sector Model of Outsourcing," Review of Development Economics, Wiley Blackwell, vol. 14(1), pages 64-73, February.
  4. Chi-Chur Chao & Eden S. H. Yu, 2014. "Content Protection, Urban Unemployment, and Welfare," World Scientific Book Chapters,in: TRADE-RELATED INVESTMENT MEASURES Theory and Applications, chapter 8, pages 127-140 World Scientific Publishing Co. Pte. Ltd..
  5. Reza Oladi, 2004. "Strategic quotas on foreign investment and migration," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(2), pages 289-306, August.
  6. Long, Ngo Van, 2005. "Outsourcing and technology spillovers," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 297-304.
  7. Gorg, Holger & Hanley, Aoife, 2005. "Labour demand effects of international outsourcing: Evidence from plant-level data," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 365-376.
  8. Baldwin, Richard E. & Ottaviano, Gianmarco I. P., 2001. "Multiproduct multinationals and reciprocal FDI dumping," Journal of International Economics, Elsevier, vol. 54(2), pages 429-448, August.
  9. Reza Oladi & John Gilbert & Hamid Beladi, 2011. "Foreign Direct Investment, Nonā€Traded Goods And Real Wages," Pacific Economic Review, Wiley Blackwell, vol. 16(1), pages 36-41, February.
  10. Ravi Batra & Hamid Beladi, 2010. "Outsourcing and the Heckscher-Ohlin Model," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 277-288, May.
  11. MacDermott, Raymond, 2007. "Regional trade agreement and foreign direct investment," The North American Journal of Economics and Finance, Elsevier, vol. 18(1), pages 107-116, February.
  12. Choi, E. Kwan, 2007. "To outsource or not to outsource in an integrated world," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 521-527.
  13. Jones, Ronald W., 2005. "Immigration vs. outsourcing: Effects on labor markets," International Review of Economics & Finance, Elsevier, vol. 14(2), pages 105-114.
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