Abstract

http://ssrn.com/abstract=336261
 
 

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Outsourcing in a Global Economy


Gene M. Grossman


Princeton University - Woodrow Wilson School of Public and International Affairs; Princeton University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Elhanan Helpman


Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

August 2002

Harvard Institute Research Working Paper No. 1966

Abstract:     
We study the determinants of the location of sub-contracted activity in a general equilibrium model of outsourcing and trade. We model outsourcing as an activity that requires search for a partner and relationship-specific investments that are governed by incomplete contracts. The extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers, the relative cost of searching in each market, the relative cost of customizing inputs, and the nature of the contracting environment in each country.

Number of Pages in PDF File: 56

Keywords: Outsourcing, Imperfect Contracting, Trade in Intermediate Goods, Intra-industry Trade

JEL Classification: F12, L14, L22, D23

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Date posted: October 15, 2002  

Suggested Citation

Grossman, Gene M. and Helpman, Elhanan, Outsourcing in a Global Economy (August 2002). Harvard Institute Research Working Paper No. 1966. Available at SSRN: http://ssrn.com/abstract=336261 or http://dx.doi.org/10.2139/ssrn.336261

Contact Information

Gene M. Grossman
Princeton University - Woodrow Wilson School of Public and International Affairs ( email )
300 Fisher Hall
Prospect Avenue
Princeton, NJ 08544-1021
United States
609-258-4823 (Phone)
609-258-1374 (Fax)
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States

CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Elhanan Helpman (Contact Author)
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-495-4690 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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