Financial Advantage, Outsourcing and FDI under Wage Uncertainty
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.
|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|
|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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References listed on IDEAS
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- 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.
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- Jones, Ronald W., 2005. "Immigration vs. outsourcing: Effects on labor markets," International Review of Economics & Finance, Elsevier, vol. 14(2), pages 105-114. Full references (including those not matched with items on IDEAS)
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