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Offshoring and Sequential Production Chains: A General-Equilibrium Analysis

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Abstract

In this paper, we develop a two-sector general equilibrium trade model which includes offshoring, sequential production, and endogenous market structures. We analyze how relative factor endowments and various forms of globalization and technological change affect equilibrium offshoring patterns. We show that, against common belief, a reduction in trade costs lowers the range of tasks offshored even though the aggregate volume of offshoring may increase.

Suggested Citation

  • Philipp Harms & Jaewon Jung & Oliver Lorz, 2014. "Offshoring and Sequential Production Chains: A General-Equilibrium Analysis," Working Papers 14.01, Swiss National Bank, Study Center Gerzensee.
  • Handle: RePEc:szg:worpap:1401
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    Cited by:

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    2. Jaewon Jung, 2022. "The Nexus between Institutional Quality and Global Market Structure: Export versus FDI," Mathematics, MDPI, vol. 10(24), pages 1-14, December.
    3. Jaewon Jung, 2022. "The Effects of China’s Participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): A Quantitative Assessment," Sustainability, MDPI, vol. 15(1), pages 1-13, December.

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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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