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Offshoring under Oligopoly

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  • Mitsuru Igami

    (Yale University)

Abstract

This paper uncovers a novel pattern of offshoring and market structure in a high-tech industry, and proposes a simple oligopoly model to explain it. Specifically, the hard disk drive industry (1976-98) witnessed massive waves of entry, exit, and the relocation of manufacturing plants to low-cost countries, in which shakeouts occurred predominantly among home firms and almost all survivors were offshore firms. I build and estimate a dynamic offshoring game with entry/exit to explain these facts, and then investigate the relationship between offshoring and market structure as well as the impacts of hypothetical government interventions.

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  • Mitsuru Igami, 2015. "Offshoring under Oligopoly," 2015 Meeting Papers 713, Society for Economic Dynamics.
    • Handle: RePEc:red:sed015:713
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    References listed on IDEAS

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