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Outsourcing, Factor Prices and Skill Formation in Countries with Non-overlapping Time Zones

Author

Listed:
  • Mandal, Biswajit
  • Marjit, Sugata
  • Nakanishi, Noritsugu

Abstract

Time Zone difference induced changes in trade and factor prices are relatively new concerns in trade literature. Here in this paper we formulate a trade model capturing the issue of Time Zone difference and communication technology revolution together to show that due to these developments skilled workers benefit. Though wage inequality between skilled and unskilled workers is widened under reasonable and, of course, sensible condition. Return to capital dwindles while educational capital gets relatively high return. These changes also attract educational capital from abroad and eventually alter the sectoral composition of the economy in favor of more skill based one.

Suggested Citation

  • Mandal, Biswajit & Marjit, Sugata & Nakanishi, Noritsugu, 2015. "Outsourcing, Factor Prices and Skill Formation in Countries with Non-overlapping Time Zones," MPRA Paper 68227, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:68227
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    References listed on IDEAS

    as
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    Cited by:

    1. Sugata Marjit & Biswajit Mandal, 2017. "Virtual trade between separated time zones and growth," International Journal of Economic Theory, The International Society for Economic Theory, vol. 13(2), pages 171-183, June.

    More about this item

    Keywords

    Time Zone Differences; Trade in Business Services; Skilled and Unskilled Labor; Day-shift and Night-shift Work; Educational Capital;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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