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Outsourcing Price Decisions: Evidence from U.S. 9802 Imports

  • Deborah Swenson

This paper studies U.S. overseas assembly imports to identify whether factors related to information or search costs appear to condition outsourcing decisions. The data for 1991-2000 show that U.S. overseas assembly imports were characterized by incomplete pass-through of production and trade costs to import prices, though products assembled in more highly educated countries passed-through a much larger portion of their cost changes. In addition, the price of outsourcing imports responded to competing suppliers' prices, with the largest responses occurring for products in capital-intense industries. These differential price responses suggest that information issues play an important role in the mediation of outsourcing relationships.

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File URL: http://www.nber.org/papers/w11184.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11184.

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Date of creation: Mar 2005
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Handle: RePEc:nbr:nberwo:11184
Note: ITI
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  1. Deborah L. Swenson, 2004. "Overseas Assembly and Country Sourcing Choices," NBER Working Papers 10697, National Bureau of Economic Research, Inc.
  2. Gene M. Grossman & Elhanan Helpman, 2002. "Outsourcing in a Global Economy," Working Papers 149, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
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  8. Carolyn L. Evans & James Harrigan, 2003. "Distance, Time, and Specialization," NBER Working Papers 9729, National Bureau of Economic Research, Inc.
  9. Peter K. Schott, 2001. "Do Rich and Poor Countries Specialize in a Different Mix of Goods? Evidence from Product-Level US Trade Data," NBER Working Papers 8492, National Bureau of Economic Research, Inc.
  10. James E. Rauch & Joel Watson, 1999. "Starting Small in an Unfamiliar Environment," NBER Working Papers 7053, National Bureau of Economic Research, Inc.
  11. Feenstra, R.C. & Gagnon, J.E. & Knetter, M.M., 1993. "Market Share and Exchange Rate Pass-Through in World Automobile Trade," Papers 93-14, California Davis - Institute of Governmental Affairs.
  12. Feenstra, Robert C., 1989. "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test," Journal of International Economics, Elsevier, vol. 27(1-2), pages 25-45, August.
  13. Gordon H. Hanson, 1997. "The Effects of Offshore Assembly on Industry Location: Evidence from U.S. Border Cities," NBER Chapters, in: The Effects of U.S. Trade Protection and Promotion Policies, pages 297-322 National Bureau of Economic Research, Inc.
  14. Gene M. Grossman & Elhanan Helpman, 2002. "Integration Versus Outsourcing In Industry Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 85-120, February.
  15. Anne Gron & Deborah L. Swenson, 2000. "Cost Pass-Through in the U.S. Automobile Market," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 316-324, May.
  16. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
  17. Tibor Besedes & Thomas J. Prusa, 2003. "On the Duration of Trade," NBER Working Papers 9936, National Bureau of Economic Research, Inc.
  18. Tibor Besedes, . "A Search Cost Perspective on Duration of Trade," Departmental Working Papers 2006-12, Department of Economics, Louisiana State University.
  19. Sven Arndt, . "Offshore Sourcing and Production Sharing in Preference Areas," Claremont Colleges Working Papers 2000-12, Claremont Colleges.
  20. Antras, Pol, 2003. "Firms, Contracts, and Trade Structure," Scholarly Articles 3196328, Harvard University Department of Economics.
  21. Mendez, JoseA., 1993. "The welfare effects of repealing the U.S. Offshore Assembly Provision," Journal of International Economics, Elsevier, vol. 34(1-2), pages 1-22, February.
  22. David Hummels & Jun Ishii & Kei-Mu Yi, 1999. "The nature and growth of vertical specialization in world trade," Staff Reports 72, Federal Reserve Bank of New York.
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  27. repec:rus:hseeco:121607 is not listed on IDEAS
  28. Pinelopi K. Goldberg & Michael M. Knetter, 1996. "Goods Prices and Exchange Rates: What Have We Learned?," NBER Working Papers 5862, National Bureau of Economic Research, Inc.
  29. Bruce A. Blonigen & Stephen E. Haynes, 2002. "Antidumping Investigations and the Pass-Through of Antidumping Duties and Exchange Rates," American Economic Review, American Economic Association, vol. 92(4), pages 1044-1061, September.
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